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Insurance & its Advantages

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  • 15/02/2016 at 10:18 am #13109
    ark_advisor
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    Registered On: 13/09/2015
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    Don’t buy insurance just because your neighbour bought it. Buy insurance because you need it.
    Here are a few points to ponder about, whilst going about fulfilling your Insurance needs.
      • What kind of insurance do I need? 
        Understand your financial goals. Once you know what your aim is, you will be in a better position to choose the type of insurance you need – protection, savings, investment or retirement.

     

      • What will my insurance policy cover?
        Different insurance policies have different covers. Make sure your financial advisor presents you with a list of recommendations, including the types of policies and benefits. Read them thoroughly to be aware of what your policy covers.

     

      • How much insurance coverage do I need?
        The amount of insurance coverage you need depends on factors such as the number of dependants, debts or mortgages, lifestyle and investment needs. Insurance cover should be to such an extent that in case of one’s demise, his / her dependents are able to maintain the same lifestyle as they used to have before the unfortunate event occurred.

     

      • How much will I be paying for my insurance cover and will I be able to afford the premiums over the long term?
        The amount of premium paid depends on the insurance cover you buy. Look at the current benefits your insurance policy provides and opt for a rider accordingly. With some riders, you may stop paying premiums for your policy if you become disabled, but will still be able to enjoy the benefits of life insurance protection.

     

      • Frequency of Premium Payment:-
        Choice of Frequency of premium payment period – Single premium, Yearly, Half yearly, quarterly and monthly should be carefully exercised. However, if your policy does not have this benefit and you are finding it difficult to continue meeting the premium payments, consult your financial advisor.

     

      • Modes of payment
        • Payment ECS
        • Credit card
        • Internet payment
        • Cash
        • Cheque

         

        Note- While exercising the choice for frequency of premium payment and mode of payment ,please ensure that you mark the appropriate column in the proposal form

     

      • What happens if I fail to make the required premium payments?
        Typically there is a grace period (15 to 30 days) during which you can pay the premium with no interest charged. If you do not pay your premium within this grace period, your policy lapses as a matter of general rule. However the discontinuation of policy is governed by the policy conditions which may differ from insurer to insurer and plan to plan.

     

    • Should I replace an existing insurance policy? 
      An insurance policy is a long-term commitment and any decision to cancel a policy should only be taken after careful consideration. Early cancellation of a policy may incur additional fees and charges. More importantly, you could lose out on valuable benefits. If you are unable to continue paying premiums on your current policy, you should consult your financial advisor on the options that are available. If you decide to replace your current policy with a new one, we would recommend that you do not cancel your original policy until you receive confirmation that your new policy is in force. This will ensure that you are not left without coverage during the interim period.

    Life Insurance provides the dual benefits of savings and security. The following benefits explain why this investment tool should be an integral part of your financial plans.

    Advantages of Life Insurance

      • Risk Cover – Life today is full of uncertainties; in this scenario Life Insurance ensures that your loved ones continue to enjoy a good quality of life against any unforeseen event.
      • Planning for life stage needs – Life Insurance not only provides for financial support in the event of untimely death but also acts as a long term investment. You can meet your goals, be it your children’s education, their marriage, building your dream home or planning a relaxed retired life, according to your life stage and risk appetite. Traditional life insurance policies i.e. traditional endowment plans, offer in-built guarantees and defined maturity benefits through variety of product options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values.
      • Protection against rising health expenses – Life Insurers through riders or stand alone health insurance plans offer the benefits of protection against critical diseases and hospitalization expenses. This benefit has assumed critical importance given the increasing incidence of lifestyle diseases and escalating medical costs.

     

    • Builds the habit of thrift – Life Insurance is a long-term contract where as policyholder, you have to pay a fixed amount at a defined periodicity. This builds the habit of long-term savings. Regular savings over a long period ensures that a decent corpus is built to meet financial needs at various life stages.
    • Safe and profitable long-term investment – Life Insurance is a highly regulated sector. IRDA of India, the regulatory body, through various rules and regulations ensures that the safety of the policyholder’s money is the primary responsibility of all stakeholders. Life Insurance being a long-term savings instrument, also ensures that the life insurers focus on returns over a long-term and do not take risky investment decisions for short term gains.
    • Assured income through annuities – Life Insurance is one of the best instruments for retirement planning. The money saved during the earning life span is utilized to provide a steady source of income during the retired phase of life.
    • Protection plus savings over a long term – Since traditional policies are viewed both by the distributors as well as the customers as a long term commitment; these policies help the policyholders meet the dual need of protection and long term wealth creation efficiently.
    • Growth through dividends – Traditional policies offer an opportunity to participate in the economic growth without taking the investment risk. The investment income is distributed among the policyholders through annual announcement of dividends/bonus.
    • Facility of loans without affecting the policy benefits – Policyholders have the option of taking loan against the policy. This helps you meet your unplanned life stage needs without adversely affecting the benefits of the policy they have bought.
    • Tax Benefits-Insurance plans provide attractive tax-benefits for both at the time of entry and exit under most of the plans.
    • Mortgage Redemption- Insurance acts as an effective tool to cover mortgages and loans taken by the policyholders so that, in case of any unforeseen event, the burden of repayment does not fall on the bereaved family.
    For more details please feel free to call on 8693800025 or email your queries on ark.advisor@gmail.com
    Regards
    Raj
            

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