Term/Saving Plan

Life Insurance is a financial cover for a contingency linked with human life, like death, disability, accident, retirement etc. Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is loss of income to the household. • Though human life cannot be valued, a monetary sum could be determined based on the loss of income in future years. Hence, in life insurance, the Sum Assured ( or the amount guaranteed to be paid in the event of a loss) is by way of a ‘benefit’. Life Insurance products provide a definite amount of money in case the life insured dies during the term of the policy or becomes disabled on account of an accident

Why you should buy Life Insurance?

  • All of us face the following risks
  • Dying too soon
  • Living too long
  • Life Insurance is needed to ensure that your immediate family has some financial support in the event of your demise
  • To finance your children’s education and other needs
  • To have a savings plan for the future so that you have a constant source of income after retirement
  • To ensure that you have extra income when your earnings are reduced due to serious illness or accident.
  • To provide for other financial contingencies and life style requirements

Who needs Life Insurance?

    Primarily, anyone who has a family to support and is an income earner needs Life Insurance. In view of the economic value of their contribution to the family, housewives too need life insurance cover. Even children can be considered for life insurance in view of their future income potential being at risk.

How much Life Insurance is needed:

    The amount of Life Insurance coverage you need will depend on many factors such as:

  • How many dependants you have
  • Whether you have any debts or mortgages
  • What kind of lifestyle you want to provide for your family
  • How much you need for your children’s education.
  • How much you need for your children’s education.
  • What your affordability is
  • You should seek the help of an insurance broker to understand your insurance needs and suggest the right type of cover

There are two types of annuities (pension plans)

  • Immediate Annuity
  • In case of immediate Annuity, the Annuity payment from the Insurance Company starts immediately. Purchase price (premium) for immediate Annuity is to be paid in Iumpsum in one instalment only.

  • Deferred Annuity
  • Under deferred Annuity policy, the person pays regular contributions to the Insurance Company, till the vesting age/vesting date. He has the option to pay as single premium also. The fund will accumulate with interest and fund will be available on the vesting date. The insurance company will take care of the investment of funds and the policyholder has the option to encash 1/3rd of this corpus fund on the vesting age / vesting date tax free. The balance amount of 2/3rd of the fund will be utilized for purchase of Annuity (pension) to the Annuitant

Unit Linked Insurance Policy

    Unit Linked Insurance Policies (ULIPs) offer a combination of investment and protection and allow you the flexibility and choice on how your premiums are invested. IN UNIT LINKED PLANS, THE INVESTMENT RISK PORTFOLIO IS BORNE BY YOU AS YOU ARE THE INVESTOR Typically, the policy will provide you with a choice of funds in which you may invest. You also have the flexibility to switch between different funds during the life of the policy. The value of a ULIP is linked to the prevailing value of units you have invested in the fund, which in turn depends on the fund’s performance. In the event of death or permanent disability, the policy will provide the Sum Assured (to the extent you are covered) so that you can take comfort in knowing that your family is protected from sudden financial loss. A ULIP has varying degrees of risk and rewards. There are various charges applicable for Unit Linked Policies and the balance amount out of the premium is only invested in the fund/funds chosen by you. It is important to ask your insurer or agent or broker questions to understand the sum total of charges that you have to incur. It is important to assess your risk appetite and investment horizon before deciding to buy a ULIP policy. You must also read the terms and conditions of the policy carefully to understand the features of the policy including the lock-in period, surrender value, surrender charges etc All the types of plans mentioned above can be offered under ULIP plans.