Types of Life Insurance Policies you would want to Invest on!!

When you invest in Life Insurance Policies, you are offered an option to choose from two categories, Term Life Insurance or Permanent Life Insurance. Term Life Insurance is something that you would invest in when you don’t want long term capital gain, where as in Permanent Life Insurance there is no time limit and you carry on paying the premium till your demise. Life Insurance Policies on the whole are governed by the tenure of the policy, the cover they provide, the premium amount that is to be paid and the advantages that they offer. However they vary from company to company.

Term Life Insurance as mentioned is a policy where in you keep paying your premium for a stipulated period of time. After the tenure is over the accumulated some is handed over to you. You could also opt to renew these policies once their term expires, by paying nominal revised premiums (higher in most cases). The two major diversification of this type of policy are Group Term Life Insurance and Level Term Life Insurance. Group term Life Insurance is usually taken by an employer for his employees, where in the employer pays on behalf of his employees by reducing that particular amount from their salary. For level term insurance the insured selects a particular period and pay premiums for the selected period. The policy automatically matures at the end of the selected period. Once you select the term say 5-10 or 15 years you cannot alter it. This type of insurance is ideal for those people who are not able to make long term financial plans.

Permanent Life Insurance is an expansive policy where the premiums are paid as long as you want to enforce the policy. In a permanent Life Insurance policy you pay premiums for an indefinite period irrespective of the fact they exceed the amount to be distributed to your dependents in case of death. The premium amount that is accumulated is deposited in a separate account. If the company performs well the deposit yields higher returns and a share is periodically dispatched to you. If the insurer decides to retain the profits made from your investment with him then you are not required to pay income tax for that amount. There is a possibility like, when you withdraw certain amount of money within the given limit you need not pay income tax for that amount. But when you deposit money in the bank you have to pay income tax irrespective of the fact you utilize it or not. So in a way it’s a tax saving instrument.

Other types of prominent insurance policies include Family Life Insurance, Whole Life Insurance & Joint Life Insurance. Family Life Insurance is a scheme that is similar to group life insurance. Here all the members of your family (mainly wife and unemployed/unmarried children) are covered. Whole Life Insurance is a type of permanent Life Insurance policy where the individual receives Life insurance coverage through out his Life. All he has got to do is to be prompt in making his premium payments. He has to pay till a certain age and be covered through out his life. Joint life insurance policies are policies that enables two individuals to be protected, but the full value of the policy is paid only once at the time of either insurer’s death. This is also referred to as the joint first to die clause. With most Insurance Companies coming up with schemes every now and then, the Insurance Sector is establishing itself as one of the most prosperous markets in modern times.

Value Life…Value Life Insurance!!!!!

Have you ever thought of being financially dependent on your children after you retire and no longer have a source of Income. Sounds terrible doesn’t it?. Think of this all your cash reserves are empty and all your investments that you made with the intent of seeing off your old age has been washed of the pipe and you have no other option other than depending on others for food, shelter and clothing. The very thought of this sends shivers down your spine…Doesn’t it?? After all it is hard predicting what is in store for the coming years. In order to ensure that you are spared of the embarrassment it is wise to opt for investment instruments that serve the purpose of long term financial security and gain. Investing in Life Insurance and its fellow products is a good investment option as it fulfills all your goals in the longer run.

It is important that you include Life Insurance policy in your investment portfolio. When you opt to invest in Life Insurance you not only invest for your future, but you invest considering your families necessities. Individuals who depend on you for a living could be deprived of an income in your absence (read demise). Hence it is suggested that you analyze every pros and cons before you opt for your Life Insurance Policy. Ideally a policy that you could afford to pay the premiums for in the longer run is recommended. Chalk out your monthly expenses and then settle in for an amount that you could afford on a periodical basis. Failure to pay the premium in stipulated time will result in the policy being confiscated by the insurer (Life Insurance Company). Also important is the coverage you get from the policy. Life Insurance Coverage determines the period for which you are actually insured. They could vary. In whole Life Insurance you keep paying the premium through out the term of the policy, where as in term life policy you pay the premium till a certain time, after which an amount (depending on market conditions) is returned to you.

There are different types of Life Insurance Policies that are offered to you by the Life Insurance Company, the most prominent amongst those are Family Life Insurance, Whole Life Insurance, Premium Life Insurance and Term Life Insurance. When you opt to go in for Family Life Insurance, all your eligible family members get covered. This generally includes your spouse and children. Usually dependent children must be unmarried and fewer than 22-23 years of age, incapable of self support. The payment is simple. Usually if you are employed the employer deducts a fixed amount from your salary and hands it over to the insurer. This amount keeps being deducted and accumulated in your policy account until you retire or leave the company. After that it is returned to you. Premium life insurance is a type of term life insurance with return of premiums paid throughout the policy term. Like other forms of life insurance, if you die during the term of the policy, your family will receive the accumulated sum benefit of the policy.

Whole Life Insurance is a sub-part of permanent life insurance where the person is eligible to obtain protection through out his life. Here the Premium rates are constant through out; hence it is advised to invest in these policies at a very early stage in life. Life Insurance where the Life Insurance Premium is paid for a stipulated period of time (5-10-15 years) is called term Life Insurance. The premium rates here are bit on a higher scale compared to a Permanent Life Insurance. A major advantage of Life Insurance is that it serves as a major tax saving instrument. Under section 80CCC of the income tax ordinance amount invested in Life Insurance Policies is subjected to tax-exemptions. If an average investor has an annual income of more than the tax limit then the amount he will invest (till one lac) in Life Insurance will be deducted from his yearly income. This facility makes it much more appealing in terms of an investment module. With recession hitting the jobs market hard, the insurance industry is possible the only sector that hasn’t been affected, simple because of the genre it dwells in. The sooner you opt for Life Insurance, the sooner you start valuing your Life.

Why is Life Insurance Considered a Good Investment Instrument??

In order to be a smart investor, one must ensure that they are financially secured, so that your economical condition isn’t affected during a period of crisis. Any other kind of investments could result in a down turn, but investing in Life Insurance has always proved to be a successful venture.

“Alas!!! Had I invested in life insurance, today I wouldn’t have fallen into this dump”. This is the statement that most people over the world have been making after facing current downturn in the economy, that’s being termed as “recession”. The average investor even though aware of the tenure that the recession lasts through fail to get themselves insured against life, most of them considering this module only to be a tax-saving instrument. Other then avoiding the current financial crisis Insurance does prove to be a source of income when you are actually out of one. You could be retired/ fired from work/ bankrupt, moreover on your demise it is the money that invest in Life Insurance Policies that takes care of your family. Fortunately in recent times there has been tremendous growth in the number of Life insurance companies, each of them coming up with their effective and convenient schemes that will ultimately benefit the investors.

When the term investment is concerned, people genuinely think of investing in various investment markets like Shares, Stocks, Bonds, Forex, Mutual funds and many more financial markets. The very first thing that an investor does is to pay some amount of money to start on with the investment. And after that he has to keep on worrying about it. In this scenario an investor is not assured that he will earn the positive earning. And incase if the economy in undergoing with downturn, then what can be worst thing for an investor. He can just fall from top to bottom and nothing left in his hand. That’s the situation the people are facing over the world today. An intelligent investor is a person who makes investments in the market but prior to that he is better concerned about his financial securities as well. He thinks of gaining huge capital returns but in a safety way that it doesn’t harm his economy. So he will preferably opt for life insurance as a source of security for himself and his families. It is very important to know about the importance of life insurance because when the things in life are going well and smooth doesn’t matters but if uncertainties arise, he will be equally insured and makes themselves safe from being infected. So investing in life insurance is not at all a bad idea for an ideal person.

There are various life insurance policies that match the requirement as per the investors needs. For e.g. Future Confident is a policy that is suitable, if the objective is long term targeted say about 15-20 years, either for children’s future or for investors own retirement and simultaneously granting protection to the investor’s family for uncertainties in life. Other then those mentioned there are various other life insurance services provided by the life insurance company. Investing in life insurance always incur tax benefits. So according to good investors perception investing in life insurance has always proved beneficiary. That is way investing in life insurance is the safest investment among the investments.