Life insurance is an ingenious financial contract that helps protect you and your loved ones against unforeseen death. It is not possible to predict when the curtain might fall but it is possible to secure the future of your loved ones with a suitable life insurance plan.

Types of life insurance plans

Life insurance plans come in many forms to suit your various needs. From growing your wealth during your lifetime to securing the future of dependence, or planning for your golden years, Life insurance plans make it possible.

Here are the most popular types of life insurance plans that you can consider:

  1. Endowment plans – These types of insurance plans help you Grow your finances with bonuses during the policy tenure as well as secure your family’s future.
  2. Term Insurance plans – These are very affordable life insurance plans available for varying tenures of 10-100 years and low premiums.
  3. Money-back plans – These life insurance plans allow you to make withdrawals from the policy at regular intervals to deal with financial needs.
  4. Unit-linked insurance plans – These insurance plans help you grow your wealth by investing in the current market through your insurer.
  5. Child insurance plans – These provide financial security for your children in the event of your demise.
  6. Retirement or annuity plans – These insurance plans help you set up a corpus for your golden years that you can withdraw as a lump sum amount or as monthly compensation.
  7. Whole life insurance plans – These life insurance plans cover you during your entire lifespan, and do not need you to specify a policy tenure.

Each of these life insurance plans comes with their own benefits. You can compare different life insurance plans and their implications, such as premium benefits, add-ons, sum assured, etc. To choose the right plan for you and your loved ones.

How to choose a suitable plan for you?

When picking the right life insurance plans for you and your family, there are certain factors that you will need to consider. Aside from choosing the sum assured to secure your family’s future, you also need to factor in The circumstances of your demise as well as the economic conditions of the time. Here are the top factors that you need to take into account when choosing the suitable life insurance plans for you:

  1. Firstly, you must choose a sum assured that will suffice to take care of your family in the future. For instance, if you opt for a 50 lakh term insurance then it guarantees that your nominees will receive the death benefit settlement of 50 lakhs after your demise. But you need to ask yourself, is 50 lakhs enough?
  2. You must also consider the rate of inflation that will be levied on the sum assured. Contemplating upon the previous example, if you purchase a 50 lakh term insurance for 10 years, then you need to consider the possible value of INR 50 lakh after 10 years. The value will not be the same as it is when you purchase the plan.
  3. The premium of your chosen life insurance plan also plays a vital role. If the premium is too high to afford during your current financial circumstances, It could lead to future financial troubles. You may not be able to make the premium payments regularly, which would cause your policy to lapse.
  4. Lastly, and most importantly, you need to consider the benefits of the life insurance plans of your choice. When comparing different life insurance plans, you must take into account how they benefit you in your current financial situation as well as protect your family’s finances in the future.
  • If you wish to grow your wealth during your lifetime while assuring financial security for your loved ones, then you need to prioritise earning through endowment plans or ULIPs.
  • If your goal is to set your partner and yourself up for the future, retirement plans are your best friends.
  • if you aim to avail of life insurance benefits for your loved ones with affordable premiums and shorter tenures, then term insurance plans are best for you.
  • If you have dependents such as children who may suffer exponentially upon your demise, then child plans are better suited for your needs.

You must consider the implications of different life insurance plans when selecting a suitable one to secure your family’s future. It must not disrupt your current finances but at the same time set up your loved ones to cope with their goals after your demise.

Conclusio

Life insurance plans are designed to help your loved ones cope with financial stress and responsibilities after they lose someone they adored. Whether you choose a 50 lakh term insurance or a 5 crore whole life insurance, you need to consider how it will impact your present finances and your family’s future.