Life Insurance

Whole Life Insurance

Rest of the plans that come under the same are-endowment plan, money back plans, ULIP, etc. provides coverage to the insured for a specific age- majorly 65 to 70 years, whereas a whole life plan provides coverage for the entire life.

In this plan, generally the insured is given a choice to pay a premium amount till the specified time which is also known as maturity period. If the insured person reaches maturity, then he/she has the option to continue the same till death without paying any additional premium and encashing the sum assured or bonuses.

As compare to others, this policy completely carry a different concept. Basically you can buy a whole life plan against a payment which can be made as a one-off sum, on a monthly or a yearly basis. If you have bought a unit-linked whole life policy, then your funds will be directed not only towards the purchase of your insurance for payment of the sum assured amount and the remainder of the amount will be invested in an investment fund.

There are different forms of whole life insurance plan that is available in the market. Each of the same is designed in a way that can easily cater different needs of customers.

Non-Participating: A non-participating whole life policy has a level premium and face amount during your entire life. The advantages of such policy includes fixed costs and relatively low out-of-pocket premium payments. Since the policy is non-participating it does not pay you any dividends.

Participating : The participating whole life policy pays dividends. Payment of dividends basically shows that the extra earnings which the company has accumulated via investments, savings from expenses and favorable mortality of the organization. There is no assurance that insured will receive dividends. However, it is possible that dividends will be there in the form of cash that will be utilized to bring down the premium payment amount or will be allowed to accumulate and will attract interest at a specified rate. The dividends can also be used for buying paid-up additional insurance to improve the face amount of coverage provided.

Who Should Opt?

Basically, a whole life insurance policy is the suitable form of offering protection to several individuals. You can invest in a whole life insurance plan if-

• You have made investment for your post retirement life and looking for others options for great benefits
• You have an estate and wants to leave the estate and all your savings for your beneficiary that is alo refer as transfer of wealth
• You are a young professional who has started earning and will be able to pay premium for a considerable time going into the future.

Advantages of Whole Life Policy

Cover for life: With such plan, the insured will be able to get the required cover for the long term. It is not like other plans where the policy term is fixed for a specific period of time. The other policies will get expire by the time and it will be hard in old age to insure yourself under an effective form of life insurance plan. In case of the insured's demise, the beneficiary will get a lump sum amount that will help them in maintaining their standard of living. Incase insured survive, then you will not get anything in return.

Assurance of coverage, periodic payments and tax benefits: A whole life insurance plan offers the lifetime coverage along with assure level premiums for a limited premium payment term. The premium will remain same throughout the policy's term. Sum assured is guaranteed, however the bonuses will depend upon the performance. There are a few companies which offer the survival benefit at the end of the premium payment term till the policy matures. Tax benefits are also available to the insured under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

Source of cash: Expert of the industry says that a person must keep 6-8 month's living expenses in the form of liquid asset. It is difficult to save such a huge cash while meeting retirement and long term saving goals. However, under the same, you will get cash at the end of the premium payment term.

Loan option: The surrender value of the policy rises over time and you can take loan against the policy's surrender value at any time. It is a good option as compared to borrowing against home or retirement accounts.

Your dependents will get benefits: No doubt, the return that your family will get will be a strong regular financial source in the family. This plan is great when it comes to estate planning. Individuals who want to pass on their estate to their legal heir as it helps create wealth.

Eligibility criteria for whole life policy: The eligibility criteria i.e. minimum/maximum entry age, premium payment term, etc., will vary from insurer to insurer. To get the details about the eligibility criteria for your chosen policy, you are advised to contact your insurance company directly who can guide you better.

Difference Between Term plan and Whole Life Insurance

Premiums: Talking about the premium in the term insurance it is to be paid for specific period whereas for whole life insurance the payment is to be done for whole life.

Maturity age: Most of the term plan covers till the age of 65 to 75 years whereas for whole life insurance the policyholder is covered for the entire life.

Cash value: There are no cash values in term plan whereas for the whole life plans cash value is there. Guaranteed and Non-guaranteed cash value which is called as dividend value is given.

Policy term: The tenure of the term policy varies from five to thirty years whereas for the whole life plan the policy is valid for the lifetime.

Paid up value: If the policyholder wants to surrender the policy there is no paid up value or any other feature offered by the term plan whereas whole life insurance can be paid up after a specified number of years.

Lapse: The term policy lapses after thirty-one days of a missed premium payment. In the case of whole life policy if the policyholder fails to make payment then a cash value is allowed to offset the premiums.

Endowment Plan

Unlike Term Plan, endowment plan pays you out the sum assured along with the profits in both the cases- death and survival. This plan charges a higher premium which is being invested in the asset market- Equity and Debt.

An endowment is a policy in which the insurer promises to pay the lump sum amount at the time of maturity. Majorly maturities are ten, fifteen or twenty years up to a definite age limit. Some plans also pay an amount in case of critical illness. Endowments amounts can be cashed early and the insured will receive the surrender value which would be determined basis how long the policy has been running and how much has been invested in it.

Types of Endowment Policies:

There are basically three forms of endowment policies which one can choose from.

Unit Linked Endowment -Under Unit Linked policies, the insurance premiums are directed into multiple units which are held under a specific investment fund that can be selected by the insured.

Full Endowment -Under the same, the basic amount ensured to be provided will be equal to the death benefit, right from the start of the policy. Based on the speculated market-based appreciation, the final payout will be comparatively higher.

Low Cost Endowment -This endowment plan is there for individuals to accumulate the funds which have to be paid after a specified time period, usually mortgage.

Key Features of Endowment Policies:

1. You will get the sum assured under an endowment policy either on survival to the term or on death occurring within the policy term.
2. Endowment policies are available as 'With Profit' and 'Without Profit' plans.
3. Under Endowment policies, bonus for the full term is payable on the date of maturity or in the event of death, whichever is earlier.
4. Premiums will be limited to shorter term or can be paid as single premium.
5. Premiums cease on death or on expiry of the term, whichever is earlier.

Benefits of Endowment Policies:

Endowment policies offers several benefits, a few of which are listed below:

• An endowment policy will offer the insurance cover during the policy term.
• It will pay a lump sum amount at the end of the policy term i.e. once the policy has matured.
• It will serve dual purpose. Not only does it work as an insurance policy but also serves as a long-term investment offering decent returns.

Endowment policies come with tax benefits: In terms of investing, endowment policies are safer as compared to other investment options and offer returns which are close to those offered by mutual funds.

Endowment policies enable long-term savings: Under an endowment policy, you will surely receive a significant amount upon maturity.

Most endowment plans will extend the insurance and provide assured benefits even after the maturity date, in some cases up to a time when the life insured attains the age of 100.

Insured have the option of opting for additional riders which provide cover for specific illnesses, critical illnesses, disabilities, etc.

How Do Endowment Policies Work?

They are not very difficult from regular insurance policies. These policies not only offer the required cover, but also help them save regularly over a specific period of time. Under the same, the insured or his/her family will receive a lump sum maturity amount which can be utilized for meeting financial needs like purchasing property, children's education, organizing a wedding or preparing for one's retirement.

Child Insurance Plan

Provides financial coverage to your child's future needs and allows you to plan his/her future in a better way and stabilize way. It is basically a combination of insurance cover and investment that secure multiple stages of your child. Life cover is something that you will get as a lump sum amount at the end of the policy.

Apart from this basic cover, the plan also assist you in offering flexible payouts at important stages of your child's life. It is obvious that you don't want to think about your death or any unfortunate incident but have you ever thought that what your child would do after your death, how he/she will manage to secure future. Basically, a child insurance plan makes sure that child's future financial needs are taken care of even in your absence.

Why Buy a Child Plan?

It is a question that normally arise. However you must be aware that normal savings would not be able to deal with the growing education costs. For the bright future of your child, you must be thinking of providing everything best to him and in such scenario education fees should be a constraint. Child insurance plans allow you to invest based on your child's education needs, your current financial status, and other monetary goals. Typically, child insurance plans offers a life cover of around 10 times the annual premium. Additionally, you will also get the withdrawal facility as needed. Along with this, you can also avail tax benefits for the premium paid.

Benefits of Child Insurance Plans:

1. Life cover for the child.
2. Investment for child's future needs.
3. You can add riders to the plan.
4. Death benefit and maturity benefits are paid.
5. You can select the premium amount based on the sum assured and the maturity amount than you choose.
6. Policy term will depend upon the age of your child. The policy term can be planned around the time you think that you require extra cash flow.
7. Waiver of premium rider can also be opted.
8. Partial withdrawals are allowed as and when you need to meet your child's educational needs or for meeting other related expenses.

Who can take Child Life Insurance?

Anyone who want to secure his child's future can invest in this plan. You can also take this plan if you wish to secure major event of your child's life such as higher education, marriage etc. In case you died then this pan will not allow your child to suffer financially and will make sure that he/she is receiving the best.

How a child insurance plan will secure your child's future?

1. Offers financial security during the most vital stages of your child's life
2. Provide a perfect mixture of investment and savings in a single plan
3. Safeguards child's future, even after demise of the parent
4. Favours disciplined, long term savings, that usually becomes a challenge

Pension Plan

This plan assists you in securing your post retirement life financially. Choose from multiple options.

For planning your retirement, there are heaps of pension plans available in the market. These plans are different from each other. Their benefits, features, exclusions etc. are different too. Pension plans are basically an investment or saving tool that cater future retirement needs.

All the pension plans are divided into two parts

• The first part is all about accumulation where insured pays the premium.
• The second refers as distribution.

Under the same, the insured will get a regular income via an annuity plat during your post retirement days. Annuity plan is a form of insurance plan that pays regular income from the started and rest depend upon the features of the plan chosen by you.

Types of Pension Plans in India

There is no doubt in saying that pension plans are there to provide peace and comfort during post retirement days and it will be there to fulfill all your financial desires when the regular income cease. But nowadays there a wide range of pension plan to choose from

Pension plans offer a sense of peace, comfort and security once your working life ceases. But there are multiple types of pension plans offered by different insurers. Let's have a look here:

With cover and without cover pension plans: Here, there is a "life cover" in the "with cover" pension plans. Under the same, the insure pays a lump sum to the family of the insured post in case of his/her death. The cover value is not really high under the "with cover" option. However, under the "without cover pension plans" do not offer life cover. Under the same, only the premium amount along with interest will be paid to the nominee on the death of the insured.

Deferred Annuity: Here, this form of pension plan allows you to pay premiums either with a single premium or through regular premiums. The pension commences once the policy term completes. You get good tax benefits. Rather, the funds are tax-free unless you plan to withdraw during an emergency.

Immediate Annuity: Here, the pension begins immediately once you deposit a lump sum amount. The pension however depends on the amount you invested as lump sum. Under Income Tax Act, 1961, the premiums that you pay are exempted for tax purpose. The beneficiary gets a compensation in case of the death of the insured depending on the annuity option chosen.

Investment Plans

This plan helps you in enhancing your wealth, savings and get an insurance coverage as well. With the motive of improving lifestyle, better & luxurious living aspirations and the growing concern makes people to think about investing an amount to secure the future.

With the same motive investment plan is there to secure all your financial goals with the current investing resources. It is true that investing your money takes a great deal of time, tools and resources. It is true that people are different and so their needs are, so a single investment plan would definitely not go well with everyone's requirements. Nowadays, insurance companies are offering a wide range of effective investment plans

Eligibility to Buy Investment Plans!

All Indian citizens, salaried, non-salaried, self-employed, any other professionals, and state/ central government employees above the age of 18 years can invest in any form of investment plan provided by several financial institutions and insurance companies.

The documents that you must be able to produce if asked, while buying an investment plan:

1. Address Proof In Original and an Attested Photo Copy For Records
2. Photo Id Proof In Original and an Attested Photo Copy For Records
3. Aadhar Card In Original and an Attested Photo Copy For Records
4. Bank Passbook
5. Pan Card In Original and an Attested Photo Copy For Records

Key Advantages and Features of Investment Plans!

Investment Plans act like a blessing for all those who believe in systematic savings and want to have a corpus of funds that can assist them in the hour of need. Under the same, you will be able to get high returns.

Features of investment plans:- SIP or systematic investment plans under which you can invest in mutual funds regularly to get compounded returns. IT is one of the biggest investment benefit that you will get as an investor.

Small Investment:- There is no doubt in saying that investment plans are great for achieving long term financial goals. You can even start with a small amount and that will leads you towards great returns. For example a Mutual Fund investment of Rs. 500 at regular intervals of week, fortnight, month or quarter is an affordable way to save and get good returns.

Disciplined investment:- If someone asked to invest or save money on your own then you might fail to do that. And investment is necessary to achieve financial goals. Investment needs dedication and focus. Keeping your habits in mind, you must start with small amount and raise it on regular intervals. With the same, you will get the habit of saving.

Easy Investment plan:- Best thing about investment plan is that you can buy the same online and offline as well without much paperwork. Thus it is the most effective and convenient tool to invest your hard earned money. Online portals facilitate a paperless transaction and hassle free procedures.

Unit-Linked Insurance Plan (ULIPs)

In all the above plans you don't have any option to select where you want to invest your money. For securing your capital most of these plans invest in debts, whereas Unit-linked insurance plan (ULIP) provides complete authority to you in choosing the best way to invest your money which you can invest in debt and equity as well. If you want to switch the current investment method, then you can do the same easily. Those who have good knowledge about the stock market can understand this easily.

ULIPs is basically a financial tool that offers insurance cover and allow you take advanatge of wealth creation.The double benefit of protection combined with freedom to choose your investment avenue makes ULIPs a truly popular financial instrument among customers.

Why you Should Buy ULIPs

A ULIP provides investors with a number of advantages, which are listed below:

Flexible: ULIPs come out with the option of switching funds as per your choice. Investors has the option of investing their hard earned money in equity or debt funds that completely depend upon your risk appetite and market situations.

Risk appetite: It allows the investors to choose among different available options as per their risk appetite. Those investors who do not want to invest big or don't want to carry any risk associated with market should go for debt funds and those who are willing to take a higher risk can opt for equity funds.

Tax benefits: Like other insurance products, it also come along with the option of tax benefits. However this tax benefit that directly linked to the form of ULIP invested, as equity funds could be taxed 15% under certain conditions.

Low charges: ULIPs do not have high charges associated with them. IRDA has put the limits on annual charge on ULIPs at 2-2.25% p.a. for the initial 10 years, with the charges on par with those of mutual funds.

Long term investment: ULIPs are a long term investment option that occur because of increased lock-in period that also reap bigger returns.

How Do ULIPs Work?

A ULIP or a Unit Linked Insurance Plan is a financial s a financial tool tat offers the needful risk cover as well as investment options for the insured. ULIPs also allow customers to invest in stocks, bonds or mutual funds. The insured can choose the investment type based on his risk appetite as all option guarantee returns.

Initially, ULIPs was not an ideal tool as it didnt offer assure retursn and primarily focus on long term wealth generation product. Nowadays, however, almost all ULIPs offer investors assured returns of double or more their initial investment.

When someone invest money in ULIPs, the insurance company divides the amount between equity markets (shares, bonds etc.) and online life insurance plans.

The investments are managed by fund managers from the insurance company, taking away the need to track the investments.

ULIPs allow the investors to invest in multiple options, ranging from low-risk to high-risk as the case may be.

ULIPs also allow the policyholder to switch between their investments, allowing them to maximise their gains when market conditions are conducive.

Features/Benefits of ULIP

ULIPs offer incredible features and benefits to customers and hence are great investment tools especially in today's fast-paced world where returns matter as much as security. Here are a few highlighting features of unit linked insurance plans that make these instruments stand out among a host of investment options.

Flexibility: ULIP schemes offer flexibility that is not just applicable to one aspect of the policy but is comprehensive in nature.

Money Back Plan

Money-back plans are just like endowment plan with only a single difference that the payout can be staggered with the policy term period. In this, some part will be returned to the insured on time to time basis as per the policy tenure. In case of death full sum assured amount will be paid out. It also includes bonus. Because of these additional features, the premiums of this plan are higher than the normal life insurance plans online.

Why you need to buy a Money Back Policy?

Money back insurance policy is a good option fro all who want to have an insurance based investment but they also want some liquidity in the same. With a money back plan or money back scheme, you will get life insurance cover along with the option of income profits. In case where you are a young individual, the policy will assist you at different stages of life.

Those who have investing in money back life insurance plan will get regular intervals for different financial needs that includes purchasing new vehicle or home, medical care needs, clearance of debts such as loans and other liabilities funding the wedding of yourself, siblings or children, etc.

Money back policies being endowment policies, the risk factor of money back plans is usually low and therefore you don't have to worry that your investment will not yield good results. Almost all money back policies gives guaranteed and fixed returns, that will allow you to plan your finances well.

How does Money Back Policy work?

When you invested your money in a money back policy, then the insurance company will tell you about the tenure for which you have to make premium to keep your money back plan active. Some policies require you to pay premiums throughout the tenure, while in some policies you need to pay for a limited number of years only.

This premium will be invested in secure avenues, and a small part of the amount goes into administrative fees and taxes. Once you start paying premium, you will get a certain percentage of the sum assured at regular intervals. It can happen when you are paying premium or once you stopped paying premiums.

The policy documents will also assist you in getting the money back payouts. Some policy offers cash on every 5 years where as some will entertain you with the same towards the last few years. You will receive the benefits of money back regularly until the scheme reaches maturity or until the policyholder dies, whichever is earlier.

If the insured meets his maker before the policy's maturity, the nominee/s will get the sum assured and death benefits as per the policy. Even if money back payouts have been made before the death of the insured person, it will not affect the sum guaranteed as death benefit. You can also add riders to the money back plans just to increase your protection levels and get higher death or maturity benefits.

For the same, you have to pay a slightly higher premium if you are adding riders to the policy. Maturity benefits, along with sum assured and accrued bonuses, are given to the policyholder if he or she outlives the plan.

Features and Benefits of a Money Back Policy:

A money back life insurance plan offer the required life cover along with the guaranteed returns on survival. It refers to be an ideal insurance product for all those people who want to offer the required financial assistance to his/her family in case of his/her unfortunate demise and it is also a good source of another income that would be beneficial for the long run.

1. Death Benefit: In case of demise of the insured, the nominee as per the policy's document will receive the death benefit. The death benefit amount is equal to the sum assured and decided by the insured at the time of purchase of the policy. Additional bonuses accrued, if any, will also be provided to the nominee. The death benefit of a money back policy is a guaranteed income.
2. Maturity Benefit: If the insured survives during the policy's tenure, then he/she will be liable to get the maturity benefit. The maturity benefit is equal to a percentage of the sum assured amount chosen by the insured. Also, any bonuses collected during the tenure of the policy will be included in the maturity benefit as well.
3. Survival Benefit: The survival amount basically refers to the amount where the insured is alive and healthy. The regular payouts related to the same will be to spread through the term and it usually carry a fixed percentage of the sum assured which is decided by the insured. The installments can be utilized for expenditures at important stages of the insured's life like a wedding, children's education funds, down payment for a new house, etc. However, if the policyholder passes away during the policy term, the survival benefit payouts will cease, the death benefit and bonuses, if any, will be paid out and the policy will be terminated.
4. Bonuses: Many moneyback polices come out with the option of reversionary bonus. A reversionary bonus is a bonus declared by the insurance company at the end of each year. The amount is equal to a certain percentage of the sum assured. The reversionary bonus is either simple or compounded. The simple reversionary bonus will not be assded in the sum assured every year, the compound reversionary bonus is.
   Apart from this, the bonus will be calculated with the assured amount, so the bonus increases over time. Money back policies also provides terminal bonus for the on-time and consistent payment of premiums by the policyholder. It is paid with the maturity benefit or the death benefit and is not fixed since it is at the discretion of the insurance company.
5. Riders: Almost all life insurance companies offers certain riders with the life insurance policy to raise the basic policy type. The add-on riders charge an extra premium and cover the insured against several risk types. Money back policies also provides critical illness riders, accident/disability rider, term rider, hospital cash rider, waiver of premium rider, or accelerated sum assured rider. Each of the riders are designed to lend a hand to the policyholder in times of need.
6. Tax benefits: Tax benefits can be enjoyed by policyholders who pay premiums towards the money back policy. The benefits are defined under section 80C of the Income Tax Act, 1961. Also, the survival benefit, maturity benefit, and bonuses are tax-free.

Money back policies is the best option for those who are looking for optimum life cover and assured returns.

Top Money Back Plans in India

Money Back Plans Features