Finance Blog

Life Insurance Investments to Gift YourLoved Ones

We spend all our lives preparing for the future. However, life is an uncertain roller-coaster ride. Nobody can predict what will happen next and how your life will turn out. It is a natural instinct for you to worry about your loved ones and plan for their future. The truth is that you cannot prepare for every exigency of life, and you have to look for ways to come to terms with it.

The greatest gift you can give your loved ones is financial security. With the right investment product, you can ensure that your family members are financially stable in your absence. A life insurance policy provides monetary coverage (sum assured) and ensures that your dear ones face no financial difficulty when you are not around to look after them.

Understanding the concept of life insurance

A life insurance plan is a type of investment that gives a life cover for a pre-determined sum assured. You have to pay a certain premium to the insurer to keep this plan active. In case of an unfortunate event during the policy’s tenure, the insurer will pay the death benefit to the nominees.

You can choose from different types of life insurance policies. Understand the various online investment plans and select the one that fits your requirements. Here, we have listed some important life insuranceplans that you should add to your financial portfolio.

Term insurance plan

A term policy is an ideal life insurance policy to safeguard the financial well-being of your family members. It is the simplest form of life insurance investment and is available at an affordable rate.

In a term plan, you can avail of a large sum assured at an economical premium. In case of the untimely demise of the policyholder, the nominee will receive the death benefit. Moreover, you get a tax deduction under Section 80C and Section 10(10D) of the Income Tax Act, 1961. However, this plan does not offer a survival benefit.

Key features of a term insurance plan

  • Affordable

A term plan is a cost-effectivelife insurance investmentpolicy. You can get a high sum assured at a nominal premium, which includes mortality charges and administration costs. Aterm policy comes with the cheapest premium as compared to other life insurance plans.

  • Flexibility in premium payment

Term insurance is a type of investmentthat offers convenience when it comes to paying premiums. You can choose to pay a premium monthly, quarterly, semi-annually, or annually. You can select the premium payment option as per your convenience and budget.

Unit-Linked Insurance Plan (ULIP)

A ULIPoffers the dual benefit of insurance and investment. The returns are linked with the market movement and can turn out to be higher than what you earn while investing in traditionalproducts like a fixed deposit or a Public Provident Fund (PPF).

You can invest in a ULIP for goal-based savings. A ULIP helps to generate returns and seek life insurance coverage simultaneously. Additionally, it offers tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.

Salient offerings of a ULIP

  • Dual benefit

A ULIP offers dual advantages in terms of insurance and investment.You can invest for specific long-term goals and receive significant returns at the end of the tenure.

  • Flexible investment options

With a ULIP, you have the convenience to choose your preferred investment fund. You canselect among equity, debt, or hybrid funds based on your risk appetite and long-term goals. Moreover, you can switch among these three funds without incurring any costs.

Life insurance is certainly the best gift for your loved ones. Choose a plan, keeping your financial requirements and risk-taking ability in mind. With life insurance, you can rest assured that your loved ones will not face any financial constraints.

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