Hello friends, through this blog today, what is life insurance? How many types of life insurance are there? Along with this, we will know in detail about all the facts related to life insurance.
Actually we all know how precious our life is for us and if life is there then everything is there. But no one knows what will happen in life due to some reason. So in such a situation it becomes very important to know life insurance in a person’s life, After an accident or death of a person, insurance also becomes very important to help his family.
One of the special features of life insurance is that it helps a person financially both during his life and after his death. To know about Life Insurance, definitely stay in the post till the end. So let’s start without any delay and what is life insurance, what are its types and how can we make it useful in our life. Together we will know what are its benefits! Get to know about it.
What Is Life Insurance
Life Insurance Definition: Life insurance is a kind of written promise made between the insured person and the insurance provider. Life insurance is a written contract i.e. a type of contract in which the insured is promised a pre-approved amount in case of his death or accident.
In life insurance, a certain amount is promised by the insurance company to the insured for a certain period of time. It is very important to have the approval of both the insured and the insurance provider. Any event is certain to happen, but it is not certain when it will happen. Therefore, in the rules of life insurance, the payment is also considered certain, hence it is also called “Jeevan Assurance”.
Types of Life Insurance
Let us know further about the types of life insurance which are given below.
- Term Life Insurance
- Endowment Insurance Plan
- Money Back Policy
- Unit Linked Insurance
What is term life insurance?
In this, the insured has to pay a certain amount, but on survival under Term Life Insurance, no amount is given by the insurance provider. The amount is given only after the death of a person, so it is called Life Cover Plan Life Cover Plan! No amount is paid even if a policy expires.
What is Endowment Insurance Plan?
Under this, the insured is given the full amount along with bonus by the insurer on completion of life insurance. The bonus amount is paid annually to the insured. The insured pays the premium, out of which some amount is saved by the insurance company which is invested in investment.
The income that comes from this investment. The same is given to the insured as an annual bonus. Endowment insurance plans have higher premiums as compared to term life insurance.
What is Money Back Policy?
In this a fixed premium has to be paid to the insured just like an endowment insurance plan and the benefit is given to the insured in a certain way. In this, the bonus amount is given to the insured in 4 or 5 years.
What is Unit Linked Insurance Plan?
In this, the amount to be paid by the insured is divided into two parts. First for the safety of human life and second for investment. Life cover is given to the insured only by investing the sum insured.
History of Life Insurance
It is believed that the Romans were familiar with life insurance! Its modern form began in 1653! Then Viliyam Gibbans of London got one year’s insurance! They were insured by Mesopotamia and Babylon insurance companies.
In earlier times goods were carried from one place to another by sea. Which was a very risky job. The merchants thought how to avoid this risk. They made an agreement between themselves and the one to whom the goods were sent. If there is any damage in bringing or carrying the goods, then we will share it among themselves. Then this settlement started in the form of loan.
This kind of bond was formed which was called the Bottomry Bond! This is where the first marine insurance started and in 1680 a company named Fire Office started the work of insuring people’s insurance.
Benefits of Life Insurance
Some of the major advantages of life insurance are as follows.
- Any insurance policy is considered to be much better in terms of protection. Promises of protection of the family are also made before starting the insurance! Along with the insured, the family of the insured is also protected.
- In Life Insurance, you can invest your deposited money in any share market investment under ULIP Plan.
- Buying life insurance at an early age can yield more benefits at lower premiums as the risk increases with age. Insurance premiums get expensive. Difficulties can also arise in getting the sum insured at an older age.
- Tax benefits can also be availed by paying under section 80C, 80CC, 80D.
- More money can be saved through an insurance policy for a long time. By saving in a systematic way, you can collect money for the education of children, building a house, marriage of children.
- After getting old, you have to retire from any work. For this also life insurance becomes necessary so that you do not have problems after retirement. Retirement Goals can be accomplished.
- So in this way life insurance proves to be very helpful in making life easier for us and our family members. There are many other benefits like this so it becomes imperative to have life insurance.
Also Read –
Top 10 Life Insurance Companies In USA
- Haven Life
- New York Life
- Northwestern Mutual
- Lincoln Financial
- John Hancock
- State Farm
- Banner Life
- Mutual of Omaha
Frequently Asked Questions
Q1. Why is life insurance necessary?
Ans- Started life insurance at the right time helps in financial problems of your children, family members, children’s education, college, other education and housing payments! When we are in need of cash, life insurance provides cash as well!
Q2. Which issues related to accidents are not covered in life insurance?
Ans- Cases like self-inflicted injuries, death due to hazardous activities, HIV or AID disease, drug overdose are covered in life insurance!
Q3. What is meant by life insurance?
Ans- It is a type of contract which is between the life insurance holder and the life insurance provider. Through which premium is provided by the insurance company to the insured as financial security.
Q4. What does insurance cover?
Ans- In this, it protects both your own car and third party damage. Third-party covers are sufficient for older vehicles, which are rarely driven. Whereas vehicles in daily use require a comprehensive cover.
Q5. Does life insurance provide any tax benefits?
Ans- Yes! You can avail tax deduction of up to 1.5 lakhs under section 80C of the Income Tax Act 1961 for the life insurance premiums paid!
Now you all know about everything related to What Is Life Insurance. If you want to know more about life insurance then comment below I will help you a lot.