How Life Insurance plan helps you To Stay Financially Safe?

[Rishi Agarwal]

Life is full of uncertainties. There is no guarantee of how tomorrow will shape up. It is for situations like these that life insurance for introduced for the general public. Life insurance is very simple; it protects the insured against many risks that are present in a person’s life. It provides the financial assistance to tackle such adversities in an efficient manner. In this article, we will explore how life insurance plan helps you stay financially safe.

In the simplest of terms, life insurance pertains to a contract between an insurance company and the insured, wherein the insurance company agrees to pay a sum assured, in case the insured person dies during the active term of the policy. This sum assured is payable in return for the regular premium payments made by the insured person as per the terms and conditions mentioned in the policy document.

Below we take a look at the protection covers offered by Indian Life Insurance Policies

Hospital Covers offered in a Life Insurance

There are several coverage benefits linked to life insurance plans. These include the death benefit, accidental death benefits, and additional benefits that can be availed through riders. Take a look for details of these covers:

1. Death Benefit

The death benefit is the sum assured paid to the beneficiaries in the event of the death of the policyholder during the policy term. The lump sum amount so paid is released only if the policyholder passes naturally or due to health-related reasons specified in the policy. For example, in case a person dies peacefully in his or her sleep, it would be termed as natural death and the sum assured would be released to the beneficiaries, as per the terms of the life insurance plan.

2. Accidental Death Benefit

To safeguard the beneficiaries from liabilities arising from the death of the insured due to causes that are not natural or health-related, life insurance policies offer the accidental death benefit rider. By paying an additional premium for this rider, the beneficiaries become eligible to receive the sum assured even if the insured passes away due to accidents or mishaps. Additionally, there is an amount over and above the sum assured which the beneficiaries are applicable to receive, in case of accidental death. However, there are exclusions to this rider like acts of war, unnecessary risks like intoxicated driving, etc.

3. Other Rider Benefits

Apart from the accidental death benefit, life insurance companies offer other rider benefits as well. Some of these include critical illness cover, total and permanent disability, covers for hospital care, surgical care, and sometimes even covers for funeral expenses in case of the insured's demise. These can be availed by paying an additional amount to the base premium of the policy.

i. Critical Illness Cover

Generally, illnesses which are heavily debilitating or even life-threatening, and may render you incapable to work for a considerably long time, resulting in a loss of regular income are considered as critical illnesses. The diseases usually covered by an insurance company in such cases are:

• Heart attack
• Cancer
• Organ transplant
• Paralysis
• Disability
• Stroke
• Blindness

ii. Total and Permanent Disability

Accidents or mishappenings that leave you with a permanent disability such as loss of limb, hearing, sight, speech impairment, etc. are covered under TPD insurance. Such disabilities strip you of your ability to work in your own occupation again. Thus, a lump sum cover is provided for you to pay the big worries off your shoulder, which you would have cleared in instalments otherwise. These include paying off the mortgage or other debts, making home modifications suitable for your altered condition or paying for rehabilitation costs, nursing and medical expenses, on-going household expenses, etc.

iii. Waiver of Premium

This is a clause in a life insurance policy, present only if specifically issued to the policyholder, which waives the premium amount during the policy term, in the event that the insured becomes critically ill or permanently disabled, as mentioned above.

Coverage Value of a Life Insurance

With respect to any life insurance plan, its coverage refers to the death benefit. This is the sum assured that is payable in the event of the death of the insured. The amount is given to the nominee mentioned in the policy document at the time of inception, or as endorsed at any later stage during the tenure of the policy. The coverage value can be enhanced by adding benefits that are not included in the basic plan. Keep in mind that adding a rider to the base plan will increase the premium amount of the life insurance plan.

How to pick a life insurance to ensure comprehensive financial coverage?

It is absolutely crucial for you to compare your life insurance policies. There are many advantages to doing this. You find the best rates, but more importantly, you also find the cover with the best features. When comparing, keep the following points in mind:

Type of life cover available

This is the single most important factor to consider when comparing life insurance. The life plans are available in different kinds such as term life insurance, endowment life insurance, money back life insurance, etc. You, therefore, have to understand what type of cover and benefits each plan offers. You need to choose the cover that will best suit your requirements.

Duration of the cover

You next need to check the required policy period. You have to calculate all the financial milestones lying ahead in your life. Make an approximate estimate of how long it would take to reach the milestones. Your ideal life insurance plan should be taken for a similar duration.

Cost of the plan

Last but not the least; you have to take the cost of the plan into account as well. This will help you in maintaining the perfect balance and keeping your life covered in a reasonable manner.

Conclusion

As mentioned above, life is filled with uncertainties. Health issues, accidents, and other unfortunate incidents may arise anytime and without warning. Given this, it is essential that you secure your life at the earliest and buy adequate coverage at the lowest possible premium costs. Insurance aggregator website Coverfox.com gives you access to top life insurance policies and helps you compare the policy features and benefits.