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You should consider life insurance as a back-up plan for your life. Life insurance in its simplest form means being prepared financially, come what may. It ensures that your family and you receive financial support in case you are not able to bring in the much-needed income yourself (maybe due to an accident, retirement, or untimely demise).

Life insurance also has many uses in estate planning, including estate liquidity, debt repayment, income replacement, and wealth accumulation. There are various insurance products available at different price points which one may consider.

I. Term Life Insurance

A term life insurance policy is one of the simplest and most affordable life insurance plans that you can buy. It provides coverage for death risk for a specified period. In the event of death of the policyholder, the sum assured is paid to the nominee in a lump sum or as monthly pay-outs. This type of life insurance gives you maximum coverage at a minimum premium. You can also widen up the coverage by buying additional riders.

Some insurance companies have come up with innovative term insurance plans where they offer a return of premiums to the insured at the end of the policy term if you survive the full term of the policy.

II. Endowment Plan

Endowment Plans are a mix of insurance and investment. These plans provide financial protection through life cover along with guaranteed returns. The policyholder receives a lump sum amount if he or she survives until the date of maturity of the policy. With these plans, the life coverage is much lower and people generally buy these plans for the maturity benefit.

III. Money Back Policy

In a money-back policy, the customer gets a certain percentage of the sum assured as guaranteed payouts at fixed intervals. In short, money-back plans are endowment plans with liquidity.

IV. Unit Linked Insurance Plan (ULIP):

ULIPs (Unit Linked Insurance Plans) provide both protection and savings combined with flexibility to the covered person. As these products are linked to capital markets, they may have the potential to deliver better returns than traditional plans. However, with high returns, there is a risk of low returns as well, as the returns depend on market performance.

V. Whole Life Insurance

Whole life insurance covers the insured during the entire lifetime of the individual or in some cases up to 100 years. Sum assured is paid to the nominee on the death of the policy holder. In the rare event that the policyholder lives more than 100 years, the maturity amount is paid to the insured.

Proceeds from life insurance that are received by beneficiaries upon the death of the insured are generally income tax-free. We at Tejas Investments have a good amount of experience in this area and can help you determine the types of policies that are suitable for your insurance planning needs.

We know that your family is most important to you, hence you will protect them and yourself with appropriate Insurance.