What is life insurance?
Life insurance is a contract between an individual and an insurance company, in which the insurance company provides financial security in return for regular payments(known as premiums)to the insurance company. In case of the policyholder’s death or if the policy matures, the insurance company shall pay a lump sum to the individual after a period of time or to their family, on basis of the contract Typically, this type of policy is chosen based on your needs and goals.
How insurance can be useful
Insurance can prove advantageous in meeting several financial goals of the individual and his family. Here are some of the important ones:
Financial cover against loss of life, which makes sure your family can support itself in your absence
Buying a house
Pension or regular income post-retirement
Post-retirement income for NRIs
These are just some of the financial goals you can achieve with the help of life insurance. More importantly, life insurance plans are flexible. This means although you won’t find an insurance plan dedicated to buying a house, you can buy an endowment plan (traditional or market-linked) with the aim of paying for a house at a future date.