A life insurance policy can be a protective blanket that you knit in your memory for your loved ones. Your family can make a claim for insurance in the event of your death and enjoy its benefits.

Contrary to what many insurance agents may suggest, life insurance does not need to be purchased for your entire life. You need it most when your children are young and you are the sole, or primary, provider of your family's income.

It is important to understand the different types and requirements of life insurance before purchasing a policy.

Types of Life Insurance

There are two major types of life insurance: term and cash value. The term insurance can be described as pure insurance without any investing parts. However, cash-value insurance can be described as a term insurance policy with an added investment section, also called the cash value.

Whole Life Insurance

A whole life insurance policy covers you up until the time you turn 99. It's a permanent type of insurance that provides both life coverage and investment finance. You purchase this type of insurance because it pays a set amount on your death. A fraction will go to building cash value by investing in the insurance business.

You get tax-deferred cash value every year. As long as you keep the policy, you can take a loan against your cash buildup funds with no tax. The amount that you pay is usually the same throughout the policy's life.

Universal Life Insurance.

This is a traditional type of insurance policy that combines the term and money-market-form investment. These policies can be used to repay the market rate in the end. Additionally, these policies can also allow you to take out tax-deferred loans. These policies don't promise a certain rate, so you won't get a high return.

Life Insurance (ULIP).

Variable insurance is a type of permanent policy that includes an investment fund linked with a bond or stock mutual fund outlay. However, these returns are not guaranteed and depend on fluctuations in the market.

Term Insurance

This is the most basic type of insurance, which provides you with all necessary coverage. This insurance is the best for most people.

A term insurance policy, like its name, can be purchased for a set period. You can buy it for one, 10, 20 or even 30 years. Since you typically only require life insurance, choose the term that suits your coverage needs. Your beneficiaries will receive the payment if your term expires. This is called the demise benefits. There is no payout for those who expire before the expiry date.

Term insurance policies generally have a maximum policy with ages. As the mortality rate rises, the premium for Term Insurance increases with increasing age. It is more difficult to get insurance if you reach 50.

COST OF LIFE Insurance

To make your investment profitable, and to be purposeful, you must not only know what type of life insurance products are available but also the price. However, life insurance's price will depend on your health, your age, and the value of the decedent benefit you wish to purchase. It is no surprise that your life insurance payment will be less if you're younger or healthier.

To give you an idea, suppose you are a healthy 35-year-old and purchase a 20year point-term policy with a fixed annual premium. You might pay Rs. 17,000 annually to receive a death benefit of Rs. 20,00,000. A premium of Rs. 50,000 might be charged if you are a healthy 50 year old who buys the same policy. Annual premiums of Rs. 50,000 This simply proves that your premium paid is directly proportional to your death rate.

But cash-value policies are more expensive and will result in higher premiums. For Rs. If you have a term insurance policy worth Rs. 20,00,000.000 and pay 17,000 per annum, you may be charged a premium of Rs. 1,50,000 per year to get a universal life insurance policy worth Rs. 2,00,000 in part as a fraction. 1,50,000 will go to the investment portion of the policy. This is a significant variation.

WAYS YOU CAN BUY LIFE INSURED

After determining your financial situation and knowing the essential factors, you can now start looking for the right policies. You should only shop for life insurance from trusted, reliable websites.

Only buy insurance policies from institutions that are in good financial standing. Enquire with your agent about the financial strength rating and a letter rating by the main rating service of your potential insurance provider before you buy life insurance.