How Life Insurance Protects Your Family
Life insurance is a fundamental tool that safeguards your family's financial well-being in the face of uncertain life events. By understanding the different types of insurance policies and how they align with your needs, you can effectively shield your loved ones from unforeseen circumstances.
Term Insurance Plans
Term Insurance Plans are designed to provide a large life cover sum assured at a lower premium, making them an economical and straightforward choice. In the event of the death of the life assured, the nominee receives the predefined sum assured, ensuring that your family is financially secure as per your wishes.
Savings Plans
Savings plans are insurance plans that combine the benefits of both protection and savings. These plans not only offer a sense of security but also allow you to save money throughout the policy term. By investing in a savings plan, you are giving your family the gift of protection while simultaneously securing your financial goals for the future.
ULIPs (Unit Linked Insurance Plans)
ULIPs offer the dual advantage of life cover and market-linked returns. With ULIPs, you can achieve various financial aspirations such as buying a house, saving for your child's education, or planning for early retirement. You have the flexibility to choose between high, medium, and low-risk investment options, making it a versatile tool for your financial planning.
Combo Solutions
A combo solution combines the benefits of a ULIP and a savings plan, providing a comprehensive approach to protecting your life and growing your wealth. This solution offers a balanced approach to financial security and growth, ensuring that your family's needs are met both now and in the future.
Let's understand this with an example:
The Case of Mr. Mahesh
Mr. Mahesh, a 32-year-old software engineer in Gurugram, earns 60,000 per month, is married, and has a 2-year-old son. He spends approximately 35,000 per month on family needs.
Mr. Mahesh opted for a term insurance plan with a sum assured of 4,000,000. After 3 years, he tragically passed away in an accident. The family then applied for the claim under the insurance policy and received the 4,000,000 rupees from the insurance company.
Considering the monthly cost of living for his family, which is around 35,000 rupees, and dividing 4,000,000 by 35,000, we get approximately 114.28 months or 9.52 years. This amount will be sufficient to cover the family's needs for about 10 years. Mrs. Mahesh and her family will be able to maintain their lifestyle and meet their financial needs with this amount.
Simultaneously, it is crucial to assess the required insurance coverage to ensure your family can maintain the same lifestyle even if you are not present. If you have any doubts or need further assistance, feel free to contact us.