Life Insurance
The untimely loss of a key earning member of the family can result in a financial crisis for the family, impacting its ability to repay loans and maintain its current living standards. To protect one’s family from such eventualities, Life Insurance cover is imminent.
Determining the value of Life Insurance cover
The adequacy of a Life cover is determined through a scientific methodology called Human Life Value (HLV) calculation that takes into account various factors like the current age of the insured, income, expenses, financial liabilities, amount required to fulfill future goals, rate of inflation etc. The Life cover determined through this mechanism ensures that the dependents of the insured are financially protected and provided for in the absence of the insured.
Types of Life Insurance covers
| TYPE OF LIFE INSURANCE | DEATH BENEFIT | MATURITY BENEFIT | TERM OF COVER | TAX SAVING | PRIMARY PURPOSE |
|---|---|---|---|---|---|
| Term plan | Yes | No | Fixed | Premium paid is tax-free till Rs 1.5 lakhs p.a. u/s 80C Death Benefit is tax-free in the hands of the nominee |
Protect family against financial liabilities and provide for day-to-day financial expenses. |
| Endowment Plan | Yes | Yes | Fixed | Premium paid is tax-free till Rs 1.5 lakhs p.a. u/s 80C Death Benefit is tax-free in the hands of the nominee Maturity benefit is tax-free u/s 10(10D) subject to certain stipulations |
Protect family against financial liabilities and provide for day-to-day financial expenses in the event of demise of the insured. Create a saving corpus if the insured survives the term period. |
| ULIP | Yes | Yes, market linked | Fixed | Premium paid is tax-free till Rs 1.5 lakhs p.a. u/s 80C Death Benefit is tax-free in the hands of the nominee Maturity benefit is tax-free u/s 10(10D) subject to certain stipulations |
Protect family against financial liabilities and provide for day-to-day financial expenses in the event of demise of the insured. Create a saving corpus if the insured survives the term period. |
| Child Plan | Yes | Yes | Fixed | Premium paid is tax-free till Rs 1.5 lakhs p.a. u/s 80C Death Benefit is tax-free in the hands of the nominee Maturity benefit is tax-free u/s 10(10D) subject to certain stipulations |
Cover child’s education and major expenses in the event of demise of the insured. Create a saving corpus if the insured survives the term period. |
| Pension Plan | Yes | Yes | Fixed | Premium paid is tax-free till Rs 1.5 lakhs p.a. u/s 80C Annuity is taxable in the hands of the annuitant but 1/3rd of the corpus can be withdrawn tax-free at the time of vesting u/s 10(10A) |
Protect family against financial liabilities and provide for day-to-day financial expenses in the event of demise of the insured. Create a saving corpus if the insured survives the term period. |
| Whole life plan | Yes | Yes | Until death (up to 100 years) | Premium paid is tax-free till Rs 1.5 lakhs p.a. u/s 80C Annuity is taxable in the hands of the annuitant but 1/3rd of the corpus can be withdrawn tax-free at the time of vesting u/s 10(10A) |
Protect family against financial liabilities and provide for day-to-day financial expenses in the event of demise of the insured. Create a saving corpus if the insured survives the term period. |
Note: Features will vary subject to the specific policy taken.
