Inflation and changing lifestyles have made it vital for every individual to focus on financial planning at an early stage. An individual financial plan should be customized to meet one’s individual needs at different stages of life. To cater to various needs of protection, saving, and wealth creation, it is important to have a balanced mix of instruments. People mainly focus on the wealth creation aspect of financial planning.
Our day-to-day life is full of uncertain risks like loss of income, critical illness, loss of life, disability, etc. So insurance companies help to cover this risk by spreading it over a large number of people or firms. Insurance plans cover the cost of unexpected events such as theft, illness, or property damage. If you buy insurance for any of your assets, the insurance company will pay you an amount equal to the value of the asset that has been lost. It gives you peace of mind to have the right insurance cover as it offers financial support in case of contingencies. In insurance planning, you need to figure out adequate cover against insurable risks and get the maximum out of the premium you pay.
Sum Assured: The sum assured that is provided by a term plan, should be sufficient enough for complete coverage for your family’s needs, even in your absence. The overall investment that you make in the form of payable premiums is the basic parameter for the sum assured.
Inflation must be taken into consideration: There is a rise in the prices of commodities and services due to inflation over some time. Insurance is a futuristic platform for your financial coverage, therefore the scope it offers must be taken into account with the corresponding rise in prices over some time.
The flexibility of Payment: A good insurance plan must be flexible to ensure that the accrued benefits are paid to the nominee(s) as per their convenience and choice. The accumulated benefits can be either paid as lump sum one-time payments or in the form of regular monthly pay-outs that suit your family’s needs as and when required.
Term of the plan: Choose a term plan, as this will directly impact the corpus that will accumulate by the time of requirement. The timely decision will give you the benefits of time and regular investment is benefitted for the creation of the fund corpus.
Payable Premiums: The insurer must be paid a premium as per your budgetary allocations. It must suit your needs and requirements. It is very essential to have any additional riders and the affordability of the plan.
Insurance is one way to protect your life, your health from accidents and disasters that can happen. It saves you from huge financial struggles and setbacks and serves as a roof over your head when things go wrong. It relieves you from a substantial financial burden at the time of crisis.
There are many different types of insurance available such as general insurance plans, health insurance, accident insurance, term insurance, retirement plan, life insurance, vehicle insurance, property insurance, etc.
Insurance plans act as a financial backup at the time of emergencies such as injury, accidents, illness, and even death which can leave you and your family facing tremendous emotional strain.
Insurance makes retirement secure over a long-term period and makes you financially secure post-retirement. The insured person will get a pension as accumulated income.
Insurance plans help to create regular savings by allocating funds in the form of a premium every year. The policyholder gets money back after a few years of investing in the policy.
Insurance helps to secure your future with a steady income flow that meets your and the family’s needs. Without it, some unforeseen crises can shake life.
Insurance provides peace of mind with financial security. The medical insurance plan will cover you and your family at the time of hospitalization. It comes in handy in a time of crisis.
It covers health care costs like vision care, dental care, prescription drugs, and other health-related items.
It also covers your day-to-day costs and larger expenses like your mortgage, so that you can focus on your health and recovery.
You can take vacations without worrying about flight cancellations or emergency medical expenses abroad.
Insurance covers repairs and replacement of any damage to your home that is covered under the policy. It offers protection against theft, damage from dangers like fire and water.
It helps with the coverage of auto repairs, healthcare costs, and legal expenses due to collisions of vehicles and injuries.
The nominees will be paid a sum assured if any unforeseen event takes place. Life insurance offers benefits when the plan matures.
If the insured person dies in an accident, then only accidental insurance will be applicable and the term insurance policy offers cover for any kind of death.
The cost of premiums is higher when insurers offer to return the premium on the maturity of the plan.
If the NRI is legally an Indian citizen, he or she can buy term insurance.
If the policyholder dies outside India, the nominees of the policyholder receive the sum assured.