Life Insurance

Life insurance is almost a basic need. It's the first step in Personal Financial Planning .It fulfills different purposes for different people and can provide valuable benefits if you make your choices carefully. Like many think mistakenly, it is not just for financial protection in the event of untimely death of a family breadwinner. It can also be a comprehensive wealth accumulation solution that benefits almost all. Whether you are young or old, rich or poor, employed or a business person - you can get a plan tailor made for you.

In a way, all investments are insurance against financial risk and all insurance is investment for a better tomorrow. Many life insurance plans also have a savings component that earns returns just like in any other investments (eg, fixed deposits, bonds or mutual funds. But the main difference lies in the fact that life insurance really is a long term investment. You must look at life insurance beyond 5-10 years to get the right benefits. It also locks up your funds for future needs so that you do not fitter away and miss your long term financial goals.

Life insurance provides two types of benefits - Financial and Behavioral. Financially, the first and the most important one - life insurance protects the family against the ‘cash flow' risk of the untimely death of the bread-winner. This is a real risk most of us underplay. Everything does not go as planned. Life throws up nasty surprises. The only way to somewhat reduce the pain of death in the family is to make sure that at least financially the family is secure.

Once this risk is taken care of, you need money for things you wanted to do in your life. Educate children, build a nice home, have peaceful retirement, meet the wedding expenses of your children and so on. To meet these financial goals - you need both Money and Planning. This is where the behavioral advantage of life insurance scores over others. Life insurance helps you plan early, save regularly, think long term and protect against downside risks.

When you save through life insurance your behavior changes subtly. You become more cautious, caring, systematic and disciplined with your savings. As you pay your premiums regularly, your savings accumulate steadily and locked in for a specific purpose in future. Life Insurance also gives tax breaks.

Our requirements and ability to cater to them keep changing based on our life stage. For example: when we are young our income, as well as our liabilities are low. However, as we grow older, we start progressing in our professions and start earning more income. At the same time, personally we move into different roles – get married, have children and our responsibilities increase.

We use the theory of lifetime product mapping to analyse our requirements during the different stages of our lives. Here, we identify the different needs that we may have at each stage of our lives and choose the right solution to meet our financial goals.

There is no right age to start investing. Starting early will always provide you an added advantage in the long term. There is always a substantial difference in the wealth of people who start saving early through a systematic financial plan as compared to those who delay.

The premium of life insurance plans increase with age. At a young age, you are medically fit and physically sound. This helps in reducing the insurance cost and in turn reduces your premium amount.

•  Unit Linked Insurance Plan
•  Traditional Savings Plan
•  Protection or Term Plan
•  Health Insurance Plan