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What kind of life insurance should one opt for?
You can choose from a variety of life insurance plans as per your
need.
Protection plans:
If you are looking for income replacement in the
event of death, protection plans are ideal. They are also ideal to
cover your family against home loan liabilities. These are simple
term plans with no frills and only basic covers at extremely low
premiums. Insurance companies are also extending protection
plans with added benefits that not only offer a lump sum amount
(death benefit) but also a monthly income for a set period of time
to your family.
Endowment Plans
– As you grow older, you start realizing the
importance of saving for the long term. There are two large risks:
the risk of untimely eventuality and the risk of living too long.
With endowment plans you are covered in both areas through
life cover and wealth accumulation. Endowment policies come
with two options — participating plans and non-participating
plans. In participating plans, the policyholder gets a share of
the company’s profits, which are declared as ‘bonus’ and are a
percentage of sum assured.
Child plans:
As a parent you have a financial responsibility
towards your children. Right from their birth you start saving to
provide them the best in life right from education to holidays to
marriage etc. At the same time you also want to secure their
dreams in your absence. Child plans allow you to accumulate
savings or give you timely payouts for the various milestones in
your child’s life.
Retirement plans:
In this dynamic and constantly changing
economy you need to secure your own future too. The best time
for you to start planning for your retirement is when you start
working. The compounding wealth in retirement plans will come
to you in the form of monthly income when you cease to work,
making sure you have a worry-free retirement.
Health insurance plans:
Our constantly changing lifestyle makes
us vulnerable to various health issues. Physical ill-health can also
affect your financial health. The risk of unexpected expenses like
emergency hospitalization, accident, multiple hospitalizations,
medical expenses before and after the actual surgery/treatment
etc. can be covered. A suitable health insurance plan will make
sure you are covered for all these surprises and that you can
provide the best treatment for you and your family.
A variety of life insurance plans to meet your insurance needs
and requirements like Protection, Savings & Investment, Health,
Children and Pension Plans are available on HDFC Bank NetBanking
Life Insurance section.
*Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an
exact calculation of your tax liabilities.
In your 20s, everything is shiny and brand new, filled with hope
and you are open to experimentation. By your 30s you are
starting to settle down. Obligations and responsibilities – a new
family, new home, bigger car – start to take up all your time.
You may even have started semi-permanently settling in a job or
got a couple of promotions. All this starts changing your thought
process and brings to the forefront the need for planning your
finances, especially if you are the sole bread earner of your family.
If you bought a life insurance policy in your 20s, you probably went
for a lower cover, but now, with increasing financial obligations
and dependants, that cover might start to seem inadequate. And
if you had put off buying a life cover in your 20s, then 30s is the
best time to start considering it.
Why life insurance and why now?
When you start a family, one of the biggest worries that plagues
you is their financial independence in case of an unfortunate
event – basically income replacement. You don’t want them to
worry about financial alternatives or leave them without some
sort of cushion. Your untimely absence could derail your best laid
plans that may include anything from children’s higher education
to owning a mortgage-free home. Life insurance provides that
cushion. In fact, it is one of the key benefits. But what it also
helps in is providing ‘living benefits’. Living benefits refer to the
returns that you could receive during your lifetime. These returns
can be utilized to fund your family holidays, assets, child’s college
fees, etc.
Still low premiums:
Unlike in your 20s, responsibilities will start
to set in with your family and life progression. Health is also a
critical care factor, which is best catered to at a younger age.
It’s best to opt for insurance plans and start early so that it will
still give you good life cover at low premium rates. The more you
delay, the costlier the premium will get.
Wealth accumulation:
Opting for plans that provide life cover
along with savings at this time will give you more time to
accumulate wealth for the future and also to compound it. The
more years you save wisely, the larger the savings will be for your
income-less years.
Short-term goal fulfillment:
Many short-term plans like
mortgage, car loan, child’s education, holiday expenses etc. can
be covered with life insurance.
Saving on taxes:
With increasing wealth, tax woes also seem
to multiply. During this stage of financial obligations, every penny
counts and therefore one should save on it. Various Sections of
the Income Tax Act, 1961 allow to save tax on premium invested
in life insurance solutions and also on benefits of the insurance
plans.
Life insurance in your 30s
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