Does your Life Insurance cover your growing needs?

A Life insurance policy is a must for all people today, given the uncertainty that surrounds the world, because of the covid19 pandemic. The most important question is, Is my life sufficiently covered? As you age and your commitments increase, so do your obligations, and it’s natural for the value of your life to increase in proportion. In this scenario, how could the life cover that was taken by you some time ago be sufficient to secure your most crucial life obligations in the future? To assist you in preparing for adequate life insurance in advance and help you think more clearly, we are explaining to you in detail what life insurance is and how you must plan for the long term, covering your growing needs of life.

Over 20 life insurance companies offer life insurance products in India that meet the diverse requirements of individuals. However, before we move on, it’s essential to have the very least knowledge about the various kinds of insurance policies on the market.

• Term Insurance: A classic type of life insurance provides complete financial security for the family members following the policyholder’s demise. The insurance company pays a lump sum amount to the nominee after the policyholder’s death due to unwelcome events such as accidental death, illness, or a critical illness. This type of policy is suitable for those who seek the protection of life only.
• Money-back policy: Very similar to a term policy, but the premiums are paid back to the policyholder upon survival for the set no. of years during the policy term. This is an excellent option for those sure of surviving the policy tenure and prefer to get back the premium amount in return for a small amount, similar to savings.
• ULIPs: Unit-linked Insurance Plans (ULIP) provide the double benefits of insurance and investment in which the premium paid is invested in the market to generate yields. At the same time, the rest is used for providing life insurance for the policyholder. The earnings generated can be utilized to plan your other goals like educational opportunities for children, overseas trips, starting an enterprise, or any other significant moment in life.
• Whole Life Insurance Plan: If you have dependents and have to continue working in a job for a prolonged period, it is essential to be insured with a plan that covers all of your life. While most insurance policies provide coverage only for a short duration, the whole life plan guarantees protection until you reach 99 years’ age, allowing you to live your life without worrying about receiving support from your immediate family.
• Retirement Plans: These policies are specifically for creating a retirement savings fund that includes insurance. If you have senior citizens as parents, buying proper term insurance is a good choice. It means the policyholder will receive guaranteed pension benefits after the age of 60 and still enjoy insurance benefits.

Requirement of Life Insurance at different life stages

Insurance for individuals: There is a misconception that you don’t require insurance while young, but it is not sure. This is the stage where you need to get a good term insurance policy because the premiums rates by locking in at a young age. Moreover, your health is also at its peak, thereby helping you clear the medical tests without much effort. Therefore, it will be easy to bear the premium payment with fewer life commitments, even if you avail of a life insurance policy with a higher sum assured. Though the minimum age limit for life insurance in India is 18 years, try to get your first life insurance policy at least between 22–25 years.

Insurance for Married: Marriage is an essential event in everyone’s life, and it brings new obligations into your life and the spouse. The plans you have for your future could get altered as you have to include your partner while considering many decisions. Your current insurance policy could not be enough at this stage and requires higher coverage. Choose to increase or decrease the life cover insurance policy to accommodate the growing needs. You may also include your partner in the same insurance policy to save on premium costs.

Insurance after childbirth: Children’s growth is quick, making it necessary for them to be better equipped with the right tools to help them attain their goals in the future. By investing in ULIP or money-back insurance policies, along with other long-term investment options, you can be sure of building an excellent financial corpus and assets that will enable financial security for them, even after your absence in their life.

Some Life insurers offer plans that ensure that a child’s educational needs up to the age of 21 years are taken care of in the event of your passing away. In addition, term plans also provide you with the option to choose from the best benefit payout options such as Lump Sum, Lump Sum Plus Monthly Income, Monthly Income, etc., for a fixed period and monthly income until the expiration date of the policy’s term.

Insurance for retirement age: Retirement is the stage of life that demands adequate health care and security. With rising healthcare costs and increasing inflation, it is essential to have an insurance policy that provides sufficient medical coverage, including critical illness coverage, terminal illness coverage, etc., to deal with emergencies. In addition, building a retirement portfolio that includes pension or retirement plans makes a lot of sense because you could wish to travel the world, go to new destinations, and take advantage of your retirement, for which you need funds.

As mentioned above, some needs are associated with every stage of life, and it only keeps growing depending on your lifestyle and objectives. So the answer to a common question – when should I get term life insurance is ‘now.’ To ensure you have the best coverage of insurance for every stage of life, it is vital to plan your insurance right when you are young. A good life insurance policy assures that the future of your loved ones is financially secure after you pass away and provides peace of mind to you while you are alive.