As you grow up and start a family of your own, you begin to understand the importance of planning for the future. The members of your family are dependent on you to provide for them in the long-run. Thus, you must take every possible scenario into consideration in your bid to give them the best of the best.
With this in mind, it is important to make a plan so that your family is well off, in case something was to happen to you. The best way to do this is to take up a life insurance policy. Basically, this involves paying a monthly premium in exchange for coverage, in case of the worst. This means that is something was to happen to you, the insurance company will pay the sum assured to the person named as the nominee. This will go a long way to help maintain financial stability, in spite of being faced with a grave situation.
This being said, there are a number of options for you to choose from and you must consider the pros and cons of each before making a decision. Let us take a closer look at two popular options.
The ULIP plan sees a combination of both investment and insurance. A part of the premium paid, will go towards providing life insurance cover, while the other part of the fund is invested into stocks or bonds, which you can manage yourself. Thus, a ULIP provides you both savings and protection in the long-term.
Another option is a term insurance plan, where life coverage will be paid for a fixed period of time, in exchange for regular payments of premiums. This is a more affordable option in comparison to a whole life insurance plan and they are valid for a period ranging from 5 to 30 years. If anything was to happen to you during this period, the insurance company will offer compensation to the nominees.
Before selecting any one of these options, it is important to consider the benefits of each. You must look at your situation and decide which offer will suit you best. The goal must be to leave a significant amount of money behind, so that you family can continue living comfortably. With this in mind, you should make a decision, keeping their wellbeing in mind.
Life is extremely uncertain and although we would all like to know where we will be ten years from now, there is no definite way to make this prediction. Thus, we must put our best foot forward and hope that everything will work out for the best.
This being said, there are a number of preventive measures that can be taken in order to secure ourselves and our finances. One of the best ways of doing this is with the help of an insurance policy. This acts like a financial safety net that can be very beneficial in the long run.
The most basic form is life insurance, which provides a monitory compensation in case of the worst. In this case, there are two options to choose from, term and whole life insurance. The former is valid for a specific period of time, say ten or twenty years according to the plan chosen. If something was to happen to the insured during this period, the nominee will receive the sum assured.
The other option is whole life insurance, where premium is paid on regular bases until a certain age. It is then given back to the insured either in lump-sum or in installments. If something was to happen to the insured during this period, the sum assured will be paid to the nominee. Thus, this works as a form of saving as well is a form of financial security.
This answers the basic question, what is life insurance. However, this is just the basics. There are more than a few options, when it comes to the types of schemes that are available to pick from. For example, there are schemes that offer coverage to the entire family or others where the premium increases, so as to make an allowance for inflation.
Here are some of the books you can go through to get more information on basics of life insurance.
This is a necessary expense and it helps maintain financial stability, in spite of be faced with a grim situation. If something was to happen to the earning member of the family it will be very difficult to bounce back into the regular routine both financially and emotionally. The amount of the policy will help in this process and will make the transition period a little easier.
Thus, it is always best to prepare for the worst and hope for the best!