According to you, is life insurance an added finance spending or a worthy investment?
If you are one of those, who believe that life insurance is a mere addition to the kitty, then, my friend, you are gravely mistaken because getting a life cover is like having a monetary cushion that helps you and your loved ones to bounce back at dire times.
It is one of the standard features of having a life cover, but did you know that specific life insurance contracts have a financial value that grows over time?
And, apart from death benefits, you can enjoy certain financial benefits when you are alive.
Certain life insurance plans affect one’s entire life and have a financial value that grows over time. Such life cover includes a death benefit, the amount paid at the time of death, and a cash value that accumulates revenue over time, similar to retirement or other savings programs.
This blog will help you understand,
- Importance of Life Insurance in one’s life
- How can a life cover help you grow money?
- Why should you invest in a life insurance plan?
And many more such types of investment and insurance-related details.
What is Life Insurance?
We all know that life insurance provides financial aid when you and your family need it the most, but ever bothered to see the process behind it?
When policyholders purchase a life insurance plan, they are bound to pay a certain premium (based on the opted type of plan and cover). Later, in return for the premiums paid, the insurer will pay a lump sum to the policyholder’s beneficiary if they meet with an untimely death.
Apart from the death benefit, the life cover also ensures that they shall receive the sum assured if the insured survives through the maturity phase.
Having a life cover gifts the policyholder with other benefits apart from the death benefit, such as,
- Tax benefits (as you pay premiums)
- Advantages of Maturity
- A helping hand to pay off loans
- Assisting in health-related & hospital back-ups
Life insurance has multiple options, and they cater to numerous audiences as per their pocket allowances, needs, and requirements, which is why you are advised to see through specific points before investing in any life cover.
You may Read: How to Have a 1.5 Cr Life Cover with Less than 15,000?
Why Should You Invest in Life Insurance?
Suppose you belong to the working class and have pricey dreams. In that case, you will understand the actual value of life insurance because such souls worry about inflation, savings, investments, and substantial monetary returns.
Also, it is vital to understand that with growing inflation because it is practically hard to reach your financial objectives just via savings. Therefore, it is vital to invest in a suitable insurance plan to grow your wealth progressively and develop such a robust financial reserve; potential insurance seekers should invest in the most appropriate insurance policies that offer higher returns.
Even though insurance plans include the risk of loss, the profit potential is more significant. And, this is why investing in the right insurance plan is crucial for developing a sound financial strategy to ensure a safer economic future for you and your family.
How to Grow Your Money with Life Insurance?
It is always said that prevention is better than cure. This phrase perfectly fits in for those who are still unaware of the benefits one can leverage from life insurance. And, if you do not plan regarding your finances but do not prepare a safety net to protect your loved ones from the challenges of life, it can end up looking like one of your worst nightmares because when money is the need at that point, even your nears and dears fold their hands.
It is vital to invest in the right areas to function as a safety net and effective savings tool.
And, this is where insurance steps in as an excellent fit for financial backup and requirements. Therefore, to say it in a nutshell, if the insurance products are incorporated into an investment strategy based on the policyholder’s risk tolerance. Life is all about taking a risk, and life insurance is an informed and essential risk that an earning individual should take. Therefore, it can be an effective method of enhancing one’s wealth.
What are the Ways to Build Wealth Wisely?
Allow us to list down certain better safe than sorry points for your financial security, and they are as follows:
Begin with Earning & Saving: You should start saving and investing once you begin earning. Saving can be considered irregular and passive finance accumulation, whereas investments play a significant role in wealth creation.
However, before you begin investing, you must first build a source to receive funding; once you chalk out the source, set aside a particular committable percentage towards savings. Now, this savings account should be kept distinct from your everyday savings and other accounts. Now, you can invest that specific amount in stocks, real estate, and many other investment platforms.
Keep Your Emergency Plan Ready: Like we say, ‘be prepared for the worst, have you ever thought about how you would tackle any health-related crisis when confronted/diagnosed with a serious illness such as cancer? A minor vehicle accident might land you in the hospital for many weeks. Then the medical expense would climb up to lakhs (if admitted to a private hospital).
In life, you should always budget for the worst-case scenario. Set aside a percentage of your monthly salary for an emergency fund that you may use in such financial crunches. It is where insurance can play a vital role in sheltering your family with financial security when they need it the most.
Wise Investments: When it comes to investing, never restrict yourself to just one type of investment tool; always look for options. Reduce your risk by locating several tools to assist you in meeting various financial objectives. For instance, you dream of buying a luxurious 4BHK flat in Bangalore or owning an expensive car. If you earn 60,000 a month and take up a straightforward way, it will take years and even a decade to save and buy both things. Whereas, if you keep your investment options open and put in money by making informed choices, you can accomplish both your dreams within a few years. You can consider buying a unit-linked insurance plan or term plan to lend you financial cover here.
What are the Best Life Insurance Policies to consider buying?
Aditya Birla Sun Life Insurance DigiShield Plan
They are also known as Sabka Vala Term Plan, come with 10 layered Options providing a platter of benefits in each of them for a multitude of audience bases. The Options are as follows:
- Level Cover Option
- Increasing Cover Option
- Sum Assured Reduction Option
- Whole Life Option (Level Cover)
- Whole Life Option (Sum Assured Reduction Cover)
- Income Benefit
- Level Cover plus Income Benefit
- Low Cover Option
- Level Cover with Survival Benefit
- Return of Premium (ROP)
Some of the features and benefits of the ABSLI DigiShield Plan are as follows:
Benefit for Accelerated Critical Illness (ACI): It is a boon for souls suffering from severe illness. As a policyholder, if your term plan is active and qualifies the T&C given in the Accelerated Critical Illness section of the plan, the guaranteed ACI payment will be issued during the ACI Benefit Cover Period. The payment will be made during the early diagnosis of the listed severe illnesses.
Survival Feature: This feature assures that a monthly Survival Benefit of 0.12% of the Sum Assured is paid in the beginning with the first policy month anniversary following the occurrence and extends until the policy term ends or the policyholder dies.
Death Benefit: As per the agreement, the insurance company pays the death benefit to the beneficiaries as listed by the policyholder.
Protection During All Stages of Life: Marriage and children are two of life’s most lovely parts. Eyeing these highly responsible additions, ABSLI has brought in this feature where you can increase your life insurance coverage based on each of these incidents without the need for any medical exams.
Terminal Illness Benefit: Let us suppose that you are diagnosed with a chronic illness such as cancer. Now, as a policyholder (if the term is active), if you are below the age of 80, you are eligible to avail 50% of the applicable Payment Assured on Death, up to a maximum of Rs. 2 crores, which will be paid as a lump payment. The cherry on the top – all prospective premiums will be cancelled.
Riders: It’s an additional perk that comes with additional cost: Read through the plan Options and add-on cost for better understanding.
Want to read more about this comprehensive plan? Click Here.
Life insurance plans can be used as savings vehicles that provide monthly income and help you plan for significant life events.
Investing your money in various channels can look risky, but when life is all about taking the risk, why can’t we take a small step to invest in the right place to secure a financial base for our loved ones?
Strategize your plans that include such insurance products based on your risk appetite.