Best Life Insurance Policies 2021

Life is uncertain. No one predicts what would happen tomorrow. Recent Covid-19 taught us the need of the insurance. Insurance is nothing but “giving financial security to your family members in the absence of your demise”. Those who love their family and want their family members to be stress-free in the absence of the breadwinner must choose “Life Insurance” as top most priority. Today most of the people focus on income earning, but not thinking on the financial burden in the absence of him. Covid taught us the need of Life insurance which comes first priority rather than investing.

Generally Life Insurance Policies are of 4 Types-

1.Endowment policies– These have higher premium(which you pay to the insurance company)and less insurance coverage. These are recommended by insurance agents as they get commission heavily than any other policies. The only advantage with this type of policies are they pays Bonus(nominal amount+sum assured)if the insurer is alive at the end of the term .

The major drawback is they offer below the inflation rate at the end of the term. What the insured opt for sum assured is worthless after 20-25 years. Example, if you opt for sum assured 10lakhs, after 20-25 years, that sum assured is below the inflation rate. This is the practical problem in India.

2.ULIPS(Unit-Linked insurance policies)- These policies are much costlier due to the administrative charges. Plus these policies are market-linked(equity)which makes the sum assured not guaranteed. Another disadvantage is premium paid above 2.5Lakh attract tax, as per the recent budget 2021-22.

3.Term Insurance– These are much cost-effective and offer higher sum assured. With a nominal premium, insured(payee)gets higher sum assurance. The major drawback is that insurance company won”t pay to the insured or his family if the policy holder is still alive at the end of the term. That means only risk coverage is applicable.

4.Money-Back Policies– In this case, the insured should pay lumpsum premium where he gets his premium in periodic installments(Mostly Quarterly, Half-Yearly, Annually)

Main points to be remember in mind while taking insurance

1.The insured(Payee)should disclose all his financial and personal health condition without hiding any secrets. Especially in Term insurance, this would be critical. Disclosing health condition in proper manner would reduce the insurance claim to be rejected

2.As online term insurances are more cheaper, it is prudent to be honest in disclosing your health condition.

3. The insured should check claim-settlement ratio before taking insurance diligently.

Best Life Insurance Policies

As said before, Term insurance is much cheaper where the insured gets higher sum assured with little premium. But it is at the insured discretion to choose which type of insurance depending on his age, responsibilities and economic condition.

In India LIC is the most preferred insurance provider as it has amazing claim settlement ratio of 98.4% and largest agents network.

But we don’t neglect Private insurance providers as they also maintain equivalent claim settlement ratio especially Max Life(Smart secure plus), HDFC(Click2Protect),ICICI Prudential(I Protect Smart) have massive response as they are genuinely settling the claims. Another advantage is that though LIC is government-backed insurance provider, these private firms Max Life, HDFC, ICICI Prudential, Bajaj Allianz offer less premium than LIC’s term plan.

But it wouldn’t be a criteria to select a insurance provider. Sit Right, think twice, compare premiums of various providers, depending on the affordibility you may choose a service provider.

There is a saying- “No size fits you all”. Take decision individually, read all the terms and conditions and proceed to check out for life insurance. There is only one thing permanent in this world- “Death”. No one can escape from it. Now it’s your decision to take apt decision.

Life insurance- A must and should for every one who have dependents. Now it’s your turn. Act smart.

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