There is a lot of growth expected in the future in the insurance sector specially in retirement plan in India because we get to see many insurance plans in the insurance sector, so that we can secure any plan for our life. Earlier we have written a detailed article about insurance, so through this article we will try to know only about life insurance. In this, we will see what is life insurance and how should we choose different insurance plans and companies.
The insurance sector in America and Europe has grown tremendously over the last century and the people doing this profession have earned themselves a lot of money. It is not that people do not get its benefits, but under government control, an insurance company like LIC has increased itself a lot. That’s why we will discuss here how the insurance plans of private companies should be compared. The success of the insurance sector depends on the purchasing power of the people of that country, so now it will have to increase a lot in India and we will see when it will happen.
In Life Insurance, we will try to analyze the main insurance like term insurance and endowment plan. Through this article, we will try to give information about how to choose the insurance plan for us through this article. We will try to see how legally we have to carefully examine the insurance plan and how the government controls it.
WHAT IS THE BEST RETIREMENT POLICY?
Determining the best retirement policy in India can be a complex task, as it depends on various factors such as individual goals, financial situation, risk tolerance, and age. However, there are some common retirement planning strategies that individuals in India can consider:
- Employee Provident Fund (EPF): EPF is a government-backed retirement savings scheme where both the employee and employer contribute a portion of the salary. It provides a secure and tax-efficient way to save for retirement.
- Public Provident Fund (PPF): PPF is a long-term savings scheme that offers tax benefits. It’s a popular choice for individuals looking for low-risk, long-term savings.
- National Pension System (NPS): NPS is a voluntary, long-term retirement savings scheme that is market-linked. It allows individuals to choose how their funds are invested, offering some flexibility.
- Mutual Funds and Systematic Investment Plans (SIPs): Investing in mutual funds through SIPs can be a way to grow your wealth over time. Equity mutual funds, in particular, have the potential for higher returns, but they come with higher risk.
- Fixed Deposits and Senior Citizen Saving Schemes (SCSS): These are low-risk options that provide a fixed interest rate, making them suitable for retirees who prioritize capital preservation.
- Real Estate and Rental Income: Some individuals choose to invest in real estate, either for rental income or as a long-term investment.
- Annuities: Purchasing an annuity from an insurance company can provide a regular income stream during retirement.
- Health Insurance: While not a direct retirement policy, having adequate health insurance is crucial in retirement to cover medical expenses.
The best retirement policy for you will depend on your financial goals, risk tolerance, and personal circumstances. It’s often recommended to diversify your retirement savings across different options to balance risk and returns. Additionally, seeking advice from a financial advisor or planner can help you create a retirement plan tailored to your needs.
What is Life Insurance? –
In the insurance policy in which the number of people in the family are dependent on the earning person, such people take life insurance to secure the future of their family. Which is of private companies and government company like life insurance company. The benefit of such insurance is given to the dependent people of the family and in return, the insurance company is paid in installments or one-time money according to the time. There are two types of life insurance in this, one only for life protection and the other to get benefits while alive.
Term insurance among the most popular life insurance This is a very well known insurance plan in the market as only the life is covered in it. Due to which its installation is very easy and economically beneficial. Traditionally, before 1990, LIC was considered to be the most trusted government insurance company in India. For which the government itself had made a law and kept the guarantee of the loss of the people on itself, due to which the credibility of this company is to be seen in the people for many days.
After 1990, by making laws in the insurance sector by the government, private insurance companies were entered in the market, due to which people started getting more benefits. LIC’s plans began to be very expensive and people started taking plans of private companies, but it is very important to choose the right insurance company in this. It is very important to understand the rules of the insurance company, because the purpose of such companies is to earn profit, so the insurance policy of the people keeps getting caught in legal complications.
What is Term Life Insurance Plan? –
Term Insurance This is a simple and simple type of life insurance through which we can determine the security of our family at a low cost. Term Insurance With this high security amount, a good amount is given by the insurance company to the family of the person who is protected through insurance after his death. Its benefits It is only the amount received by the family in exchange for the security of a person, which is available after the death after determining the time.
After the end of the term in term insurance, if nothing happens to that person and the time limit is over, then no amount is received. Still, why is term insurance the most popular in the market? We have to know this. The annual amount that we have to pay for endowment life insurance is five times more than for term insurance for the same sum assured, so that insurance plan is much more expensive than term insurance.
Inflation This important factor is very important to keep in mind while taking a life insurance policy, in which the annual profit of term insurance is pre-determined and fixed, while the amount of other life insurance plans keeps increasing with age. That’s why term insurance looks like a lot of loss to see, but if you analyze it, then it is a very profitable investment. Sum Assured of Term Insurance With this simple annuity amount, we can determine the financial security of our family.
Life Insurance & Health Insurance –
By the way, on our article written on other insurance, we have tried to tell what are the different types of insurance. So today we are trying to write in detail on Life Insurance. When this insurance plan was available only through the government company LIC before 1990, then its benefits have been very limited. After 1990, when the private company became the insurance sector, very attractive plans were introduced, but still the percentage of settlement has been very low.
That’s why we see mainly two types of insurance plans through life insurance, in which we see through the term insurance plan and endowment plan. In term insurance, it is only financially secured to the family of the person in the stipulated time, in which this amount is received on the death of that person. In endowment insurance, this is basically the purpose of financial security, but along with this, this insurance plan gives the amount as a sum on the completion of the time limit.
In which the death of that person is not necessary, but the amount to be paid annually in an endowment insurance plan is five times more than this term insurance. Health Insurance This is a different insurance plan from life insurance, which is an insurance plan designed keeping only health in mind. It does not have other facilities like term insurance plans and endowment insurance plans. Health Insurance This is mainly a special health-related insurance plan, in which this insurance is taken for the health-related problems that occur during the time of insurance.
Term Insurance & Endowment Insurance –
- Purpose – The purpose of taking a term insurance policy is to pay an annual amount only for the financial security of the life. Endowment insurance policy It is the second objective of saving money along with the protection of life.
- Coverage – Life cover is covered by term insurance for a stipulated time period, whereas endowment insurance has life cover as well as insurance cover to build wealth.
- Premium Charges – The amount paid in term insurance is much less than the sum assured, whereas the amount paid in endowment insurance is much higher than that of term insurance.
- Maturity Benefits – In term insurance, it is the only purpose of the protection of life, after the end of which the policy terminates, while in endowment insurance, the person gets a fixed amount after the expiry of the term while he is alive.
- Payment Method – The premium amount to be paid in term insurance is fixed at one go or from a fixed time limit and no amount is received at the end of the insurance time limit, while the amount to be filled in endowment insurance is fixed at a time.
- Benefits – To take additional benefits in term insurance, higher premium has to be paid in which accident, physical disability due to accident and critical and critical illness, same as endowment insurance also have to pay an extra premium amount and get additional benefits.
- Withdrawal Option – There is no provision of withdrawal in both the insurance plans, so once the insurance policy is started, it remains in force till the time it expires, or it gets lapsed for which the claim is not received.
- Tax Benefits – Benefit is available under section 80-C of the Income Tax Act for an annual premium up to 1.5 lakh. Under Section 10-D, this benefit is available on the amount of settlement in term insurance, while in endowment insurance, the amount received after the completion of the term of insurance is available as exempt from income tax.
How to Choose Life Insurance Policy Plan –
- Determine the purpose of withdrawing your life insurance policy.
- Make a comparative analysis of all the life insurance plans available in the market that are accessible to you.
- Based on your financial capability, decide which plan will be right, so that the amount can be determined in your financial budget.
- The members in the family who are dependent on you should include those people in life insurance so that the minimum amount of your life insurance can be fixed and there is no need to include the people of the family who are not dependent on you in the insurance policy.
- While determining the policy of any company, definitely see the history of policy payment of that company so that any problem may arise in future.
- As soon as the life insurance policy age, the family gets as much benefit as possible, so take out the policy by determining this.
- While taking out a life insurance policy, do not hide any illness so that in future the policy benefit can be created for your family as all life insurance companies spend a lot of money in legal and investigation.
- Although laws have been laid down by the government for the protection of the people, but still, while taking out any policy, definitely read and understand its rules.
- Periodically analyze your life insurance objective to ensure that any changes are made.
- If you have never done any medical checkup before taking an insurance plan, then definitely do your complete medical checkup, so that if any, disease occurs in the future, it can cause problems for the insurance claim.
- Keeping the inflation rate in mind for the next 30 -40 years, take out an endowment insurance plan, which will give you good value for it in future.
- Insurance plans taken through online platforms are cheaper than taking life insurance from an agent.
Features of Life Insurance Policy –
- There are mainly two types of insurance in which one is life insurance and the other is non-life insurance.
- There are mainly two types of life insurance which are term insurance and endowment plan insurance.
- The installment available in a term plan insurance plan is much less than that of an endowment plan and it only secures your life.
- Endowment Plan Insurance This is an amount you get at the end of your life while you are alive and its installment is five times more than the term insurance.
- In life insurance, we have to pay extra money for diseases like heart attack and cancer.
- Endowment plan This is mainly done for the purpose of saving, so we have to decide the amount keeping in mind the inflation.
- The success of the insurance company is seen according to its settlement ratio and the actual amount received is important.
- In the life insurance sector, government, insurance companies like LIC as well as private sector companies are seen in the Indian market.
- Private sector companies make this profit in the market for this purpose, so the customers are exploited due to legal ignorance, so the government gives protection to the customers by making laws in it.
- Later we take life insurance for our age, the more it becomes expensive because with age our diseases increase.
- If there is any physical disability during the course of the insurance, for this it is further filled by the installation company.
- Hiding a disease while taking out insurance creates a problem for the claim, so it is necessary to give the right information while taking out the insurance.
Critical Analysis of Life Insurance –
Insurance It is a business of taking money in exchange for compensation and protection against future crisis, which is called insurance and it was first seen in England for the first time in relation to business. Therefore, it is a profit making sector, how can people withdraw money from it, this businessman always thinks, it has been created from this concept. There are many controversies on how right or wrong this concept is, but this product is running very fast in the market.
In today’s capitalist market, instead of protecting your life, we have to protect ourselves for our family. It is not that there are no government schemes for this, but in India, it is a very difficult task for people to open a bank account and keep it running. That’s why the government insurance scheme of Rs 12 has failed. Every bank holder has to keep the minimum amount, in which many people have failed due to which the government’s plan has failed.
After meeting the basic needs in India, very few people are left with an insurance policy or other savings. The economic budget of educated people earning simple income also runs very hard, so insurance schemes in India still have not been as successful as they are seen in countries like America and Europe. In those who come for insurance claim settlement, the insurance company is successful in harming the customers with the help of their legal experts.
In this way, through this article, we have made available information about life insurance for you, how important it is for the financial planning of our life, we have to decide considering our financial capability and purpose. In this we can also say that if we are financially successful in any business or job, then our family is that much financially secure. Most of the people do not have enough income that they can provide financial security to their family only on the basis of their profession, so this concept of insurance seems important to us.
In the digital age, buying a good insurance policy online, not buying from an agent will be the right decision, so if an agent tells the disadvantages of online, then it should be understood that he is confusing. Legally speaking, this is a contract that the insurance company has to fulfill in the future, so we need to see its rules and the credibility of the company. We have told what precautions should be taken for this, through privatization, we see many insurance companies in the market which are in the market with good plans.
Through this article, we have tried to tell in detail about the life insurance policy, what benefits it gives us and how to take it. We have also seen the main types of life insurance plans and we have tried to do a comparative analysis so that it is clear for you to take an insurance policy. Talking about the government, earlier there was no trust in the people for the insurance policy, but when the government made a law and made people believe in the safety of their capital, then it became popular among the people.