In Life Insurance we offer covers to protect the individual against the risk of "dying too early or living too long".
Each individual has got a certain financial value attached to his life in the form of his earning potential.
If he dies at a young age or during the time when he had an earning potential his family suffers a financial loss in the form of loss of his potential earnings.
A lot of his obligations towards the family remain unfulfilled due to his sudden demise.
This is called the Risk of Dying too early and it can be protected against by taking life insurance coverage.
Every individual plans his life & his sources of income to the best of his ability taking into account his life expectancy.
Sometimes, despite the best of planning the individual is not able to provide for contingencies such as serious / chronic / prolonged illness for himself or his spouse which results in all the planning going haywire.
If a person survives beyond his expected age his planned sources of income could diminish or become inadequate due to a variety of reasons.
This could result in his not having money at the time when he needs it most and is not in a position to go and earn the same.
We call this the risk of living too long and protect against the same by taking whole life insurance policies where withdrawals are possible as & when required or by taking Pension policies or annuities.
Term Insurance is also known as Pure Risk Insurance. This covers the risk of the death of the individual only.
One has to pay premium upto a certain period of time or term, in case insured dies the whole sum assured would be payable to the family of the insured. There is no return involved if nothing happens to the individual.
This is beneficial to an individual of any age as it provides for the highest sum insured at the lowest possible rates.
This is a popular insurance plan which not only provides insurance cover for the family in the event of premature death but also ensures a lump sum payment after the prefixed term along with bonus & final additional bonus.
This is useful for any individual who wishes to plan for a future event in his life like the marriage of his children or for their higher studies or for any other contingency.
Here the individual pays for a certain period and gets the returns at the end of the determined period. In case of a unit linked plan he can withdraw the money anytime during the duration of his policy also.
This plan provides protection against the risk of living too long. Under this plan the individual pays the premium upto a certain period of time and gets the maturity benefits on the completion of the term. After getting the maturity benefits the life of the insured is covered upto the age of 70 to 99 varying from company to company.
This policy is beneficial for an individual who wants to protect himself in his older days and also wants to leave some asset behind for his spouse or his children on his demise.
A money back policy is also known as an anticipated endowment policy. The salient feature of a money back policy is that it provides for a cover for a limited period which normally extends to a maximum of 25 years. The insurance company pays back a certain percentage of the sum assured every 5 years (or 4 also in case of certain companies) depending on the duration of the coverage period. In addition to this on the maturity of the policy the sum assured and bonus is payable.
A money back plan is very suitable for an individual who is just beginning his career or his family as it provides for the periodical availability of money to the individual.
Child insurance policies are the most prevalent form of insurance covers taken by the parents to provide for the secured future of their children.
Child insurance policy coverage can be taken in any of the following forms:
Where The Parents, paying The Premium
In such a case the insured person is the child and the parents pay the premium. In some cases the parents choose a waiver of premium benefit rider on their life in which case on the death of the paying parent the insurance company pays the premium for the remaining period, thus ensuring continuation of the desired benefits to the insured.
This policy is specifically very beneficial for children when they are insured for a long duration with a limited paying period as the policy acquires a high value over a long period of time & serves as an asset for the child's future.
Where The Child Is The Beneficiary
In this case the life insured is that of the parent and the child is the beneficiary. In this case the child gives the claim money in the unfortunate death of the parent.
This policy is useful for parents who want to provide for their child's future to protect him against any eventuality.