3. To provide liquidity to one’s assets

 When one dies, one may leave some liquid assets (such as cash, CDs, and savings bonds), and some illiquid assets (such as real estate, an automobile, and stocks). The illiquid assets may have to be sold in order to meet these obligations when they come due. This may cause a financial loss if the assets must be sold cheaply in order to get the money on time. Life insurance can avert this situation, because the proceeds are available almost immediately upon the death of the insured.

4. To create an asset for one’s heirs

After the debts and expenses are paid, there may not be much left over for the family. Life insurance can automatically provide assets for them after the death of the insured.

5. A great investment vehicle.

 Some types of life insurance policies may actually make money for you, as well as provide the benefits described above. This can help with long-term financial goals.

Insurance for all, right from a Bachelor to the Retired one…

Your need for life insurance changes as your life changes. When you’re young, you typically have no need for life insurance, but this changes as you take on more responsibility, and as your family grows. Then, as your responsibilities once again begin to diminish, your need for life insurance drops off.

Let’s look at how your life insurance needs change throughout your lifetime.

The carefree school days

Childhood is typically a time of no worries, no cares, and no responsibilities. A child depends on others to take care of them, not the other way around. Thus, there is generally no need for life insurance at this point in an individual’s life.

The independent Singles phase

As a young adult, you become more independent and self-sufficient. You no longer depend on others for your financial well-being. But in most cases, your death would still not create financial hardship for others. For most young singles, life insurance is still not a priority.

Some would argue that you should buy life insurance now, while you’re able and the rates are low. This may be a valid argument if you are at a high risk for developing a medical condition (such as diabetes) later on in life. But you should also consider the earnings you could realize by investing the money now instead of spending it on insurance premiums.

If you have a home loan or other loans, your death would leave your dependents responsible for the entire debt. You might consider purchasing enough life insurance to cover these debts in the event of your death.

Your life insurance needs increase significantly if you are supporting a parent or grandparent. In this case, life insurance could provide continued support for your dependent(s) if you were to die.

The responsible Married period

Married couples without children typically still have little need for life insurance. If both spouses contribute equally to household finances and do not yet own a home, the death of one spouse will usually not be financially catastrophic for the other.

Once you buy a house, the situation begins to change. Even if both spouses have well-paying jobs, the burden of a mortgage may be more than the surviving spouse can afford on a single income. Credit card and other debt can contribute to the financial strain.

In order to make sure either spouse could carry on financially after the death of the other, both of you should probably purchase a modest amount of life insurance. At a minimum, it will provide peace of mind knowing that both you and your spouse are protected. Again, your life insurance needs increase significantly if you are caring for an aging parent and Life insurance becomes extremely important in these situations, because these dependents must be provided for in the event of your death.

The caring Parenthood phase

When you have young children, your life insurance needs reach a climax. In most any situation, life insurance for both parents is appropriate. Single-income families are completely dependent on the income of the breadwinner. If he or she dies without life insurance, the consequences could be disastrous. The death of the stay-at-home spouse would necessitate costly daycare expenses. Both spouses should carry enough life insurance to cover the expenses that would result from their death.

Dual-income families need life insurance, too. If one spouse dies, it is unlikely that the surviving spouse will be able to keep up with the household expenses and pay for childcare with the remaining income.

The peaceful Retirement moments

Once your children are grown, your life insurance needs decrease. You’ll live off your retirement savings, and hopefully you have accumulated assets that can be passed on to your heirs when you die. You may need a regular monthly income and continue the insurance cover, which would take care of your medical expenses.

       Types of Policies

Life Insurance
Life insurance is also called as Long term insurance because it is meant for a long-term period which may stretch to several years or whole life-time of the insured. Long-term insurance covers all life insurance policies. Insurance against risk to one's life is covered under ordinary life assurance. Ordinary life assurance can be further classified into following types:

       HOW TO CHOOSE AN INSURANCE PLAN 

A wide range of insurance products are available in the market. Each insurance product is different from the others having some unique attributes which are devised to meet specific needs of different individuals. However, with such a wide range of products available, it becomes very difficult for an individual to choose an insurance plan that is best suited to meet his requirements. Based on the financial plans and needs and one's affordability to pay premium, an individual can choose any of the plans available in the market. Some of those plans are listed in the table below:

         FAQs - INSURANCE

Que: Which insurance plan should I choose?
Ans: Individuals have different needs at different phases of their life-cycle. Therefore, the most important factor to be considered while choosing an insurance plan is your age. People needing protection for short-term death benefits and is exposed to short term debt obligations like loans etc are recommended to choose Term assurance. For people seeking long-term death benefit protection are recommended to opt for whole-life insurance plan.

Que: How can I pay the premium?
Ans: Premium can be paid through ECS facility (if available), or dropping the check at any of the drop-boxes of the insurance company, or by visiting the local branch office personally and paying in cash or by cheque.

Que: What is ECS and how can I avail it?
Ans: Electronic Clearing Service (ECS) is a facility offered by banks which facilitates automatic payment on a selected date in the future. The advantage of ECS is that one does not need to remember payment due dates and writing periodic cheques to make payment and late payment charges can be avoided. ECS facility (provided it is offered by your bank with which you have an account) can be availed by completing the ECS mandate form provided by insurance companies.

Que: Can I change the mode of paying premium?
Ans: Mode of premium payment can be changed if the insurance company has an arrangement for such change. It is recommended that the insured contact the insurance company to know whether such change is allowed. However, most companies do allow their clients to change the mode of premium payment.

Que: How can I track the performance of my ULIP policy?
Ans: Performance of a ULIP policy can be tracked by visiting IRDA's website (http://www.irdaindia.org) or website of the respective insurance company. (IRDA Link provide in our website)

Que: Can I take loan against my insurance policy?
Ans: An insured can take loan against his policy if such a provision is specified in the policy document and the insured meets the requirements of the policy document.

Que: Does a mediclaim policy covers reimbursement of medical expenses due to accidental injury?
Ans: Yes, generally all mediclaim policies cover reimbursement of medical expenses due to accidental injury subject to the terms and conditions of the policy.

Que: Is cumulative bonus in my existing individual mediclaim policy from one insurer transferable to an individual or floater mediclaim policy from any other insurer?
Ans: Yes, cumulative bonus in case of individual mediclaim policy is transferable if the policy has not lapsed (subject to documentary proof). However, in certain cases, relaxation upto seven days may be provided subject to fitness proof.

Que: Are there any additional costs to avail value added benefits?
Ans: Yes, additional costs are needed to be paid.

Que: Is my pre-existing disease covered in a medicalim policy?
Ans: Generally, pre-existing diseases are excluded from the mediclaim policy. However, some policies do cover pre-existing diseases after a specific time period.

Que: Is critical illness covered under individual mediclaim policy?
Ans: Yes, critical illness is covered under individual mediclaim policy

Que: Is 24 hours hospitalisation necessary in all cases?
Ans: Generally it is necessary. However, in many policies there is a provision for Day Care Treatment under which medical expenses towards specific technologically advanced day care treatments/surgeries are covered. For such treatments, 24 hour hospitalisation is not required.

Que: Is maternity benefit available under individual or family cover (floater) policy ?
Ans: No maternity benefit is not available. However, it is available as an extension in Group mediclaim policy.

Que: Are expenses for treatment in a non-network hospital reimbursable?
Ans: Yes, the expenses are reimbursed by the insurance company.

Que: Are medical expenses covered under personal accident policy?
Ans: The policy provides the medical expenses coverage extension on payment of 20% additional premium and subject to the 20% of CSI or 40% of claim whichever is lesser.

Que: Can claim be made within the first 30 days of buying the individual / family floater policy?
Ans: The claim can be made only if the medical expenses are incurred due to an injury. However, medical expenses due to illness are not covered within the first 30 days of buying the policy. This condition does not apply in case of renewal.

Que: Is sickness like fever, cold, cough etc. covered under the policy?
Ans: Any illness/disease until it requires hospitalisation is not covered under the policy. However pre and post hospitalisation expenses for specific number of days are covered under different plans.

Que: What is meant by a No Claim Bonus (NCB)?
Ans: No claim bonus refers to a discount that an insured receives from the insurance company on renewal of the policy in case he has not made any claims during the previous year.

Que: Is my no claim bonus transferable if I change my insurer?
Ans: Yes, the insured is entitled to get the no claim bonus from the new insurer if it stands accrued as per the records of the previous insurer.