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How to choose the best Life insurance policy?

Updated on August 5, 2017

What is Life insurance? Every man/woman needs a life insurance as no one can be certain about the future. Life insurance ensures that your loved ones receive a lump sum (called Death benefit) in case of untimely death, so that they can take care of their needs. They are a form of asset in a sense. Above all, life insurance gives peace of mind and security to the policyholder and his/her family. Life insurance also boosts your retirement income. A life insurance can either be term insurance, say for a period of 15 or 20 years, or it could be Whole life insurance. Apart from the above, life insurance also offer Tax exemption benefits

How to choose the right insurance policy? Life insurance should be chosen in a way which suits the specific needs of an individual, viz, monthly income, premium paying capacity, availing interim benefits like loans, repaying a debt or taking care of your children’s needs in future

For instance, if you are 55 years old, you may need insurance only for a short span of time. On the other hand, if you are young, you may choose to acquire insurance for a longer period of time for a relatively low premium.

Cover your Family: It is prudent to insure all your family members under one policy. Some policies offer Family life insurance cover for affordable premiums. Husband and Wife together can avail Joint Life insurance plans. LIC Jeevan Saathi is an example of Joint Life insurance

Different types of Life insurance policy plans

Life insurance plus Health insurance: While Life insurance is essential for life, you may need money to take of your health problems while you are alive. ICICI Prudential HealthAssure Plus is an example of the above

Life insurance plus endowment Assurance: Jeevan Anand from LIC is an example of Life insurance plus Endowment fund.

Unit Linked Insurance Plan (ULIP): ULIPs are a combination of insurance cum investment plans. A Fixed amount is taken as insurance premium and the rest is invested in the market in instruments like equities.

Pension Plans: These provide income security after retirement.

Whole Life insurance: A permanent life insurance will pay you as long as you live. It pays a death benefit if you live to be 100 years old, or even if you die tomorrow. But premiums for Whole insurance policies are higher than for term insurance. Such plans may offer flexibility to withdraw money for any emergency without having to surrender the policy. Max Life Whole Life Super is an example of whole life insurance. LIC (Life insurance Corporation) also offers Whole Life policies

Premium and Term of insurance: Insurance premium amount must also suit your paying capacity. If you need cover only for a short time, such a policy will pay you only if you die during the term of the policy. Young individuals generally must not go for this kind of a policy. Remember that premiums are low when you are young and increase as you age. Some Term insurance policies can be renewed when the period ends, but you may be charged a higher premium

Companies will generally use many parameters like age, gender, health condition to determine your premium rates.

Get a Quote: Insurance companies will have a calculator to determine your premium rates. You may get the quotes based on your specific needs directly from the company or through an insurance agent.

Tax Saving benefit: Life insurance is one of the best ways to save tax. You get Tax exemption under Section 80C/80CC and 80D/80DD of Income tax act

Most preferred life insurance policies in India: Some of the best performing and most preferred Life insurance plans currently are LIC Jeevan Anand, SBI Life, Reliance Term plan, Kotak Assured, Bajaj Allianz etc


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    • JvicIndia profile image

      John 6 months ago from India

      Hope this hub is useful to those seeking life insurance plans