LIC of India – Life Insurance Corporation of India

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Life Insurance Corporation of India

Life insurance in India has been trend setting since over 100 years. India being one of the most populated nations in the world, the importance of insurance is not as extensively understood, as it should be. Life Insurance Corporation is the most sought after Insurance offering organization that has been trend setting since more than five decades now! LIC has showcased the true relationship between an insurer and an insured. It follows principles which are customer-friendly and develops a sense of trust within them. Mentioned below are some of the objectives of the LIC:

  • To widely spread Life Insurance, especially to the rural areas and to the socially and economically backward classes. This will help LIC to reach all insurable people in the nation and offer them adequate financial cover against death at a reasonable cost.
  • To carry out business with supreme economy and with the complete realization that the money belongs to the policyholders.
  • To act as the trustees of insured people in their individual and collective capacities.
  • To meet the various life insurance requirements of the society that would occur in the varying social and economic environment.
  • To engage all people working in the Corporation to the finest of their ability in furthering the interests of the insured public by offering efficient service with courteousness.
  • To encourage amongst all agents and employees of the Corporation a sense of contribution, pride and job contentment through discharge of their duties with devotion towards accomplishment of Corporate aim.

Nevertheless, Life insurance is an amazing tool that will assist your family unit in meeting their essential requirements and lead a secure life even when you are not around.  This is because the Insurer will pay the recipient of your Policy a preset amount of money post your death. It could also be given if you are bedbound with a crucial sickness. Life insurance is thus the most important insurance Policy that you can have in your savings and investment portfolio.

Why one must opt for Life Insurance?

Consequently, it has become vital these days for you to have one or more insurance policies. Below mentioned are a few key rationales as to why you should get life insurance:

Family’s monetary needs:
If you are the bread earner in your family, then the family’s earnings will end after your demise. With no stable resource of earnings, the standard of living will drop and they may not be able to gather even fundamental requirements like education. Thus, your life insurance Policy will come to your family’s help during such parts of life.

Repayment of Loans and Expenses:
You may have occupied a loan along with your better half. Or else you may have lent money from a pal for commencing a business. As well, you may have just started your family and your child is still very young. In all these cases it is your other half who will have to put up with the heavy burden of paying off the loan and managing your child’s education. These are most important expenditures and you can help your other half by buying a life insurance Policy early in life.

Upper hand to Draw Loans against Insurance:
In addition to using your life insurance Policy sum to repay your loans, you can also make use of your Policy to draw a loan against it.

Varied Investment alternatives:
You can also make use of your life insurance Policy as a fine investment option. There are a variety of insurance policies and you can utilize them for diverse purposes. For instance, retirement plans, child insurance plans, whole life insurance plans, Term life insurance plans, etc. Apart from Term plans, which do not have an investment factor, all others are superior investment options.

Sickness and Accidents:
Life insurance policies are at all times a first-class protection tool against the financial strain that you will face during a severe illness or accident. You can get treatment from the top hospitals without worrying about the financial load. In an ideal world, all insurance policies should be bought when you are young and free from illnesses.

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Tax Benefits:
Life insurance policies are an excellent way of cutting back on tax. With varied types of alternatives, insurance policies today are not just designed for insurance reasons but are also eye-catching investment choices. From childhood to old age, there are a variety of options for everyone. You should then think about your young family and buy life insurance policies early in life, when you are still young and free of disease.

An indispensable aspect of financial planning is making provisions for your family and dear ones following your death. Life insurance can make certain financial security to the people who mean the most to you, for instance your spouse, children and parents. A warily executed life insurance policy can assist to plan for life’s uncertainties and provide peace of mind, knowing that the future of your dear ones is safe and secure.

The Significance of Life Insurance:

  1. Life insurance pays for immediate expenditure –Payment dues can start off accumulating post the happening of a death. Life insurance can be made use of to pay for immediate expenditure, for example – funeral services, due hospital and medical bills, mortgage payments and meeting study expenses for children.
  2. It is a resource of money –Life insurance provides access to money for paying grocery bills and other daily expenses. It also aids protect your estate by offering tax – free cash to pay estate and other obligations.
  3. Your family’s standard of living can be maintained.With the right coverage, your family’s lifestyle and standard of living can be sustained, adding much needed normalcy during a difficult time.
  4. Huge variety of options –There are 2 fundamental kinds of life insurance: Term life and Whole life. Term life policies proffer death benefits, thus if you pass away, your nominee will get the money back, but if you live post the pre-determined span of the policy, you are not entitled to advantages. Whole life or permanent insurance is much more high-priced, but these policies are unrestricted and also mount up a cash value that the policy holder can make dividends from and borrow in opposition to/or redeem upon surrendering the policy.
  5. Modify your policy and coverage –If you have dependent kids, a spouse and parents to care of, you would desire a policy that would guard them after your demise. Usually, policies are opened for the wage earner of the family unit, but a home maker’s contributions are time and again unobserved. You might mull over a policy to cover child care, car pooling and household errand expenditures in the incident of a home maker’s death. On the other side, as you grow-up and kids or parents are no more reliant on you for income, you can decrease your coverage or drop it completely.
  6. Sufficient coverage makes a difference –A traditional law of thumb is that your life insurance policy is equivalent 5 to 10 times your yearly income. These days, advisors will look at the number of dependents you have, the duration they will be reliant upon you, and the lifestyle they look forward to live after your demise. It is not an easy equation, but in common, you will require more coverage than a usual plan presented by an employer, which typically sums one or two years of your gross income.
  7. Improve your credit score –A life insurance policy is regarded as a financial asset and may perhaps add to your credit rating, which could be supportive when trying to get hold of medical insurance / house / business loan.
  8. Life insurance can be free from bankruptcy –Largely, life insurance plans are not affected by bankruptcy and stay put if you declare bankruptcy. Nevertheless, you will require conferring with a bankruptcy professional, as every case is exceptional.
  9. Life insurance is not a basic product –It is prudent to speak to a professional who can walk you through the advantages and disadvantages of existing plans and assist you to select coverage that works greatest for your individual state of affairs, at present and in the future.