While the concept of life insurance has evolved in various ways over the decades, its core still remains the ability to ensure the financial future of your loved ones after your passing. The death benefit paid out from a life insurance policy can make an enormous difference in the lives of your family members.
The Benefits Of A Life Insurance Policy
The role and importance of insurance in an individual's life cannot be overstated. Here are some of the benefits of a life insurance policy.
- It helps your family fulfil any financial obligations such as outstanding loans.
- It provides funds to your family to meet the educational expenses of your children.
- It helps compensate for the loss of regular income for your household.
- It enables your family to provide the necessary care and medical attention to your parents or any family members who are ill.
What is A Comprehensive Insurance Policy?
Whilst opting for a basic life insurance policy is a beneficial decision, opting for a comprehensive insurance policy is an even better and wiser decision. Comprehensive policies such as Unit Linked Insurance Plans (ULIPs) combine the features of both life insurance and wealth creation through market-linked returns2. To understand the benefits of a ULIP investment, it's imperative to discuss how the plan works.
There are two elements involved in a ULIP. One is your standard life insurance cover, which provides your family with a death benefit in the event of your demise during the plan's tenure. The other part is market-linked investments, which involves paying a part of your premiums towards a common pool known as a fund.
The above fund invests your money in various asset classes such as equity, debt, or a hybrid fund with the purpose of earning returns that will be provided to you on maturity. Because ULIPs are life insurance products that also cover your goal to build wealth, they are categorised as comprehensive insurance plans.
Why You Should Opt For A Comprehensive Insurance Policy
While the need for a life insurance policy can hardly be overstated, most people prefer that their premium payments be used to secure returns that can help them accomplish their financial goals without compromising on the protection aspect.
At Tata AIA, we offer comprehensive policies with a myriad of benefits
Market-linked Returns2: With the Tata AIA plans, you can choose the type of fund in which you would like to invest. There are two options to choose from: equity and debt. Equity funds involve investment in a company's stocks and shares, whereas debt funds invest only in debt instruments. Both types of funds have different degrees of risks and benefits attached to them.
You can decide on a fund based on your risk tolerance as well as your financial needs. If you are risk-averse, you can pick debt funds, whereas if you wish to undertake more degree of risk, you can opt for equity funds. Furthermore, if you want medium risk, you can choose a balanced fund, which invests in a combination of equity and debt funds.
Life Cover: Along with a choice of investment fund, this plan offers you a life cover of up to 100 years. The sum insured under the plan shall be paid as a lump sum amount to your beneficiary in the unfortunate event of your death.
Accidental Death Benefit Cover: This plan also has an accidental death benefit in the form of an additional sum insured over and above the sum insured for your life cover. In addition to this, if you happen to die in an accident caused by a mode of public transport, your beneficiary shall receive twice the amount of the additional sum insured.
Accidental Total and Permanent Disability Cover: In the event of an accident leading to a total and permanent disability, this comprehensive insurance plan shall provide you with a payout. Furthermore, if such a disability results from an accident in a mode of public transport, twice the aforementioned sum shall be paid to you.
Critical Illness Benefit
Flexibility of Premium Payment and Period: You can choose the period for which you wish to make the premium payment and the frequency of said payments, which can be:
Tax* Benefits: Under Section 80 C of the Income Tax Act, 1961, you can get a tax* deduction of up to ₹1,50,000 on your life insurance premium payments. In addition to this, the death benefit under a life insurance policy is exempt from income tax* under Section 10(10D) of this act.