life insurance is something you may consider adding to your financial plan if you’re interested in providing a measure of security for your loved ones. permanent life insurance policies that have an investment component allow you to grow wealth on a tax-deferred basis. if you need money to buy a home or pay for college, you can borrow against the cash value of a permanent life insurance policy.
term life insurance could be a good investment if you don’t want to leave your loved ones with the burden of paying off debt or other expenses. however, you can think of term life insurance as an investment in the sense that you are paying relatively little in premiums in exchange for the peace of mind knowing that in the event of your death, your beneficiaries will receive a relatively large death benefit. if you are interested in a policy for a fixed period with a built-in savings mechanism that rewards you for your payments later on, a return of premium (rop) life insurance policy may be an attractive option. “sure,” you say, “but the permanent life insurance policy guarantees its return.
to address such issues, there exist life insurance plans that can ensure the financial well-being of your loved ones. a term insurance plan is the most basic type of life insurance policy that provides complete financial security to your dependents in case of your demise within the policy term. under the lump sum payout option, the entire coverage amount or the sum assured is paid out to the nominees or dependents as lump sum in one go. in contrast, customers also have the option of selecting staggered payout when buying a term plan.
this means, some part of the sum assured will be paid as lump sum – mostly 35%-50% – while the remaining part is paid in monthly instalments for a predefined period. another popular type of term insurance plan is return of premium (rop) insurance under which all the premiums of the customer are returned back on maturity of the policy term. now, if he chooses a premium payment term of 10 years and policy term of 20 years, starting from the 11th year, he will start receiving a monthly payment of approximately inr 85,000 for the next 10 years. sarbvir singh is the ceo of policybazaar.com. aashika is the india editor for forbes advisor.
permanent life insurance policies that have an investment component allow you to grow wealth on a tax- money back life insurance plans offer insurance coverage along with maintaining liquidity through regular income for risk-averse individuals. it is a very costly way to invest. there’s the cost of the insurance protection itself – which, by the way, is usually more expensive than what you would pay, best whole life insurance, best whole life insurance, life insurance investment plans, best life insurance investment plan, insurance investments products.
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