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Life is unpredictable and can change in moments. Insurance can protect your health, medical, and financial interests against unexpected crises.
It is an investment tool wherein the insurance provider offers financial security in exchange for your premiums. The payment of these premiums depends on the type of insurance you have. There are multiple available insurance policies. Each type of insurance policy serves a different and definite purpose.
Let us deep dive into insurance policies and consider investing in ones that create a shield for life’s unexpected twists and turns:
Term Insurance
A term insurance policy is curated with a mindset to provide your beneficiaries with the coverage amount that helps them lead their lifestyles in your absence. It can be used to fund education, fund lives, and repay some loans & the sum assured is exempt from tax to a certain extent based on the terms of the Indian Income Tax Act 1961.
Medical Insurance
Medical insurance is a crucial insurance policy you must buy. Medical insurance saves you from eroding your finances when an emergency crops up. These days healthcare can be expensive. Medical bills can pile up & you may need more for your pockets to bear. With this, the premiums are higher; however, considering an emergency, it is better to have insurance when not needed & to need it and not have one.
Whole life insurance
Whole life insurance covers your life until you turn 100. It is different from a term insurance plan and must not be confused.
ULIPs
ULIPs stand for Unit Linked Insurance Plans. This policy comes with a dual-pronged approach to insurance. This is one of a kind of insurance policy that invests a part of its investible corpus in mutual funds. One is an investment component that can be further curated per your needs and risk appetite, wherein you can invest in equity or debt or a mix of equity and debt. The other is insurance coverage, which provides you with coverage for your life. Upon your unfortunate demise, your family or beneficiaries can claim this coverage amount.
Conclusion
These are some of the insurance plans you can avail of for yourself. Before purchasing any policy, please check out what the policy entails. Ideally, term and medical insurance are most important as they care for most of your needs. Consider a mix of ULIPs only when you are at a decent age and looking for safer investments that provide you with returns.
However, not getting an insurance policy may go against your financial health. Any unforeseen expense may eat up your savings. To hedge against these expenses, the premium you pay helps you be insured. Your insurance comes to your rescue when things go haywire.
Hence, having thorough knowledge and understanding helps you make wise decisions.
