Which Policy is Beneficial for You – Life Insurance, Term Insurance and Health Insurance?
Insurance is an agreement wherein a third party provides the indemnity from certain pre-specified losses like damage, illness, death, theft, etc. Various insurance policies are available in our country, but three of them are more popular amongst others. These three types of insurances are Life Insurance, Term Insurance and Health Insurance. Three of them have their own benefits as well as limitations. Therefore, we must know about the basics of insurance before making a buying decision.
Let us discuss about these three insurances in-depth to understand the perspective thoroughly:
- Life Insurance: The most purchased policy in the last couple of years by Indians is Life Insurance Policy which offers financial assistance to your loved ones in your absence. This works on a simple logic that you pay premiums for a specified period of time then at the time of your death, and your nominee will receive a lump sum amount from your insurance company.Life Insurance policy is an ideal policy for middle-aged people with good income because it has hefty premiums. So, it is essential that you check the premium amount and payment frequency before buying any policy as the failure to pay the premium amount may result in the cancellation of the policy.
There are various kinds of life insurance policies available in the market like whole life insurance, permanent life insurance, ULIP (Unit Linked Insurance Plan), Endowment Policy, etc. All these plans involve insurance along with one or other type of investment which makes their premium amount go higher and higher. Therefore, someone with a limited source of income always tries to avoid getting insured. But there is one plan which is specially designed for the people who want a pure protection plan, which is affordable and easy to understand, i.e., Term Life Insurance.
- Term Life Insurance: Term insurance is one of the most affordable as well as flexible insurance plans. It works on a simple principle; you select a coverage amount along with the specific term for which you want to get insured, and that is it. Term Plan does not have any investment factor involved, and it comes with a single purpose of protection; thus, it has a nominal premium amount which is easily affordable by every individual.
It is also easy to understand because it does not have any ROI (Return on Investment) factor involved, so the calculation of premiums as well as coverage amount is quite simple to know for even a layman. The online calculator helps in calculating the premium amount, which you will be liable to pay if you clear all the checks being performed by the insurance provider.Term Insurance has the most affordable premiums, but these premiums are directly proportional to the age of the individual, in other words, premium amount increases with age. So, it is always advised to purchase term insurance as soon as possible to grab great coverage benefit in the minimum premium amount.
Apart from affordability, Term Life insurance has several other benefits also, which makes this insurance plan worth buying. It offers tax benefit up to Rs 1.5 lacs under section 80C of the Income Tax Act, 1961. Not only this, even the lump sum coverage amount which is given to the beneficiary of the policyholder is also totally tax-free under section 10 (10D) of the income tax act, 1961.
3. Health Insurance: It is an insurance which provides you with the coverage on pre-defined health-related expenses including medical expenses, any medical costs or hospital admission charges etc. Various insurance providers have separate term and conditions; few of them cover dental problems under health insurance while few do not include it.
Health Insurance gives coverage to all primary health conditions but limited to a specific amount and post reaching the limit of health insurance, you will have to bear the expenses. Health Insurance Policy could be a good option in case you have a medical history and have a separate protection plan.
It is high time, and you must start thinking about adding an insurance plan to your financial kitty if not added yet. If you are also planning to purchase an insurance plan, then you must read about the term and conditions in detail. In case of any confusion or query, you can connect with the insurance experts of BimaKaro.in by merely visiting the website www.bimakaro.in.