Investors should keep in mind, to have discipline in their investments, if they remove money or don’t pay the insurance premiums the investment portfolio can have a negative impact.
Life insurance was always an important financial buy, but it has become imperative especially in the current times. Having said so, purchasing one is really a task, as there are too many types of life insurance policies in the market.
You might have been suggested about endowment plans and their maturity benefits, or about term plan and how they provide more coverage for a lesser premium. Experts say, people often get confused, and end up buying the wrong product. Hence, it is important to know about different kinds of life insurance policies and their benefits so that you can make an informed decision while getting an insurance policy.
For instance, whole life insurance offers coverage till 100 years of age of the policyholder, an endowment policy provides the combined benefit of life insurance along with savings, whereas money-back insurance policies offer periodic return along with the benefit of life insurance cover. On the other hand, savings and investment insurance plans offer the policyholder an opportunity to save and gain long-term returns, while a retirement insurance policy helps to create a retirement corpus, ULIPs offers the benefit of investment along with life insurance, whereas term insurance provides full risk cover against any type of eventuality to the policyholder.
Rakesh Goyal, Director, Probus Insurance, says, “Life insurance in India can help investors achieve financial freedom. Having said that, one should choose their product carefully.” For instance, a risk-averse investor should look at traditional products like endowment plans, that provides the combined benefit of life insurance along with savings. Whereas, a money-back plan can help a family for long-term or even short-term financial goals, as they offer periodic returns. However, investors who are investing in the long term and can take some amount of market risk, they can look at unit-linked insurance plans (ULIPs).
Additionally, for retirement one can look at annuities, whole life, or retirement plans, that will helps the policyholder to create a retirement corpus. Goyal says, “In short life insurance has multiple products for every life stage of an individual which can not only give the insurance protection but even the investments return.”
Experts say, investors should keep in mind, to have discipline in their investments, if they remove money or don’t pay the insurance premiums the investment portfolio can have a negative impact.