Term Life Insurance And Ad&D Coverage - Drury University: Fill & Download for Free

There are many benefits of life insurance considering the different situations and different natures, individuals, and businesses in mind. Life insurance acts as a financial protection and helps to combat against the uncertainties in life. Peace of mind and financial security is one of the main benefits of life insurance and majority of the people buy insurance for the same reason.1. Returns on InvestmentLife insurance comes with an investment component as well. It can be coupled with market linked products or it can be fixed as well depending upon the policy you opt for. It is also dependent on the risk appetite you have. Generally, longer the period, higher the returns on investment.2. Achieving Financial GoalsHaving life insurance helps in achieving many long-term financial goals like buying own car, dream vacation, saving for your child’s marriage, or even a saving for a worry-free retirement you have always dreamt of. Goal setting and life insurance go together. You need to save as per your risk appetite and income. Connect with an expert if you wish to save or invest.3. Availability of LoanBased on certain proportion, you are also allowed to avail a loan. This amount can be for any financial emergency or even if you want to invest in business. Insurance company uses the cash value your policy has and based on that they issue a loan to you. The interest might be levied based on company’s terms and conditions. If you want to avail the benefit, you can check for loan against policy. And, if you have a home loan, it can help you re-pay it. The corpus built through life insurance is also a good amount to re-structure or re-pay the home loan.4. Income Tax BenefitsIf you are a business-owner or a salaried person, everyone can enjoy tax benefits you get under the income tax act, 1961, for buying or having a life insurance policy. Masses also buy life insurance policy to just avail the tax benefits. However, that is not the correct way to look at the life insurance. We need to look at life insurance as a financial protection. Section 80C can be leveraged to leverage the maximum permissible limit of INR 150,000.5. Added Advantaged or BenefitsMany life insurance policies offer death benefits. It is for the nominee or the family members of the policyholder. In case of anything happens to the policyholder and meets an unfortunate death, then the death benefits are offered to the nominee or family members. You can even buy the other policies at discounted rates or half of the price.6. Building a Valuable CorpusIt acts as security, so building a corpus which can fund us in any emergency is important. Life insurance helps us in the process for it. Also, there is not any compulsion that you need to use it in emergency. You can use it to buy whatever you want with that amount.So, having a right security for us and our loved ones in life is must. Leverage all these advantages of life insurance to achieve it.Hope I have been able to answer your question.

Life insurance is a vital component of sound family planning. Whilst everyone around is aware of its importance, most only tend to purchase when there is a critical need in life that drives them towards it. Having life insurance early on can have some serious benefits.Benefits of Life InsuranceTake a look at the benefits galore of having a life insurance policy.1. Risk Coverage: In lieu of the premium paid, the life insurance policy offers risk coverage to the insured and his or her family in the form of financial compensation.2. Different Plans for Different Uses: You can custom design your plan depending on your immediate and future financial goals. However, the more premium you pay, the more benefits you get.3. Cover for Health Expenses: Some of the life insurance policies also have critical illness and hospitalisation expense coverage. Check with your service provider for these value adds.4. Promotes Savings & Helps in Wealth Creation: Life insurance ensures that you also create wealth as the insurance company invests the premium paid in profitable ventures.5. Guaranteed Income: Your beneficiaries receive a guaranteed sum assured amount in case you meet with any unforeseen eventuality.6. Loan Facility: If there is a need, you can use the life insurance policy as a guarantee to avail a loan from a financial institution. This is available on select life insurance policies only.7. Tax Benefits: The premium is tax deductible under Section 80C of the Income Tax Act, 1961.Whilst it is important to know the benefits of having a life insurance policy, you also need to know which type of policy will best suit your requirements and expectations.Types of Life Insurance PoliciesThese are the various types of life insurance policies available in the market.1. Term Insurance Plan:You buy a term insurance plan for a fixed time period, usually in blocks of 10, 20 or 30 years. A term life insurance does not carry any cash value. Therefore, you do not any maturity benefits either. This makes term life insurance policies more affordable in comparison to other types of life insurance plans.2. Endowment Policy:With an endowment policy, you have the added advantage of the policyholder receiving a lump sum of money if the insured survives beyond the maturity of the plan. That’s the only difference between a term life insurance and an endowment policy.3. Unit Linked Insurance Plan:If you are looking to build your wealth and finance your life goals, then a unit linked insurance plan is the way to go. The premium paid towards the plan partly goes towards the life insurance cover and the rest is invested in market linked products. You can partially withdraw funds post the lock-in period is over.4. Money Back Policy:Very similar to an endowment plan, the Money Back Policy too offers several survival benefits which are proportionately allotted over the tenure of the policy term.5. Whole Life Policy:The Whole Life Policy is the most expensive type of life insurance available as it extends up to the entire life of the policyholder. You also receive survival benefit with the policy and have the option to partially withdraw funds, if need be. Some types of whole life policies allow the insured to use it as a guarantee to avail a loan.6. Annuity/ Pension Plan:The premium that you pay is accumulated in the form of assets by the insurance company. It is subsequently distributed to the insured in the form of an income by way of an annuity. It can also be remitted as a lump sum as per the terms and conditions of the policy.Which brings you to the absolutely essential question of claim settlement.Claim Settlement ProcessIf an unforeseen eventuality does occur and your beneficiaries are required to file a claim on your life insurance policy, ideally you should ensure that the process is smooth and seamless for them as far as possible. To get an idea, read reviews online on the insurance provider’s claim process and their rate of honouring the claims raised.Other than that, the claim intimation must contain all the necessary details such as Date, Place, and Cause of Death. This should be accompanied by a claim intimation form and other supporting documents like:·Certificate of Death·Copy of Insurance Policy·Legal Evidence of title in case insured has not appointed a beneficiary·Deeds of assignmentThe insurance company will go through the claim submission and verify all the documents before settling the same.Principles of Life InsuranceBefore you invest in a life insurance policy, be aware of the principles on which it works. There are broadly four major insurance principles applied in India, these being:Insurable Interest:This principle basically gauges the individual’s interest with respect to a specific life insurance policy. The level of interest may be due to a personal relationship, a family bond or more. Depending on the level of interest, the insurance company may either accept or reject the prospective insurer’s application. This is typically done to prevent policy misuse.Law of Large Numbers:This principle works on the theory that reducing loses in the long term can ensure stability even when experiments are done with large numbers.Good Faith:By purchasing life insurance, you are entering into an agreement with your insurance provider. This should be done in good faith. Share all relevant information as masking any detail can result in serious repercussions in the future.The insurance company too must explain their terms and conditions of the policy to the policy applicant as transparently as possible.Risk & Minimal Loss:The principle of minimal risk says that the policyholder must take all the required precautions to minimise the possibility of any hazards. This includes following a healthy lifestyle, getting a regular health check-up and more.Points to Consider for Life InsuranceBefore you purchase your life insurance plan, make sure that you adequately research your options to make a well informed decision. Your aim should be to get a policy that offers maximum benefits and also allows you to save.Consider your premium payment options as most insurance providers will accept them either annual, semi-annual, quarterly or on a monthly basis. Choose a schedule that is best suited to your convenience of making payments.Always read the terms and conditions, fine print and any other information relevant to the policy before you purchase it. Remember that there generally is a lock-in period that you have to abide by. Some insurance providers may offer you a lock-in time frame which is around 15 days’ time within which you can return the policy if you are not happy with it in any way.Liked this answer? Here are a couple more questions answered by us:I just started earning. How do I start making a financial plan?Which term plan is best suited for a 31 year old in India?

I had a life-changing experience while routinely processing pay increase approvals at a large corporation. Paperwork arrived one day requesting an exceptionally large early merit increase outside policy guidelines for a young research scientist.After checking the employee's performance evaluation file, I frowned. A few years of excellent work had earned him strong merit increases, but his most recent job performance had slipped badly. No new evaluation supported the extraordinary early increase requested now. His present salary was generous. There was no justification for approval of a policy exception.When I investigated further, it got worse. The immediate supervisor told me his subordinate's performance had plummeted in the few months since his last review! The performance deterioration was so sudden and dramatic that the employee was ordered to take a complete physical examination. It revealed he was dying of a rare fast-acting fatal brain disease.Still in his late twenties, with a wife and kids, he would leave little money to his family. His boss had requested the large early pay increase to raise the base salary which would determine the disability stipend paid while unable to work. Everyone in his chain of command was anxious to activate the salary increase before the unfortunate young man soon officially left work permanently and became ineligible for the raise. I swiftly agreed: the salary increase was a small but worthy gesture.Before approving the raise, I considered what effects the pay increase would have on his total reward package. His final paychecks would be a little bigger. His disability payments would be slightly higher for the short period before he passed. His life insurance amount might change as well because it too depended on base salary. It suddenly occurred to me that our company-paid life insurance policy specified fixed absolute death benefits dollars according to broad categories specifying where the annual salary fell.I discovered that the exceptional increase requested by the boss would not change the death benefit. But if the increase were four percent higher, his salary would enter a higher benefit payment category, doubling the life insurance payable to his family.Quickly calling the relevant top corporate executive, I explained the situation and presented a proposal. By extending our generosity a little bit more, we could perform a REALLY good deed. The executive was aware of the tragedy and had earlier agreed to the original raise for the unfortunate scientist. I argued that another four percent and its miniscule eventual impact on our long-term life insurance experience rate was a small price for the human benefits we could provide.I clarified that our discussion was confidential. No one else was aware of the opportunity I had discovered to help the family this way. No one would ever learn about the possibility if he rejected it. Pointing out that no one had asked for this and we didn't have to do it, I added that once the thought struck me, I could not in good conscience fail to call the opportunity to his attention. His approval was necessary for such an extraordinary and exceptional raise that exceeded the special increase he had originally endorsed.Delighted with my pitch, he hesitated for hardly an instant before agreeing. I then immediately went backwards through the chain of command, informing the various executives and managers that papers authorizing a new salary increase were being prepared as I spoke. They were overjoyed at the news that I had actually approved an even higher amount, had found a way to supply far more insurance money and had already cleared all obstacles. I expedited the paperwork, making sure that the scheme worked as planned, and then told the employee's immediate supervisor to notify him of the unexpected windfall the corporation had arranged for his survivors.When the employee did die soon afterward, his passing was eased and his family's burden was lightened somewhat by the corporate action. No one was told of my part; but I still treasure the knowledge that I was able to make a bureaucratic job highly responsive to human values and to assist other managers to feel pride in both their company and themselves.That was the best compensation I ever received during my career in the compensation field.