Traditional Insurance (Money-Back and Endowment Life Insurance Policies)
Endowment Policies are investment product which covers the investor’s life risk for a definite period akin to a Term Policy, but also have a saving element associated with it. Thus, they are regular savings plan which has life assurance too.
This means that the nominee will receive the sum assured along with bonus in case of the insurer’s death while the insurer will receive the maturity amount in case he or she survives the policy period.
Money Back Plans are a special type of endowment life insurance plan where the insured or the policyholder receives regular payouts as a part of survival benefit from the Insurer. These payouts are paid in installments before the policy period ends.
How does Traditional Insurance protect your dependents or your loved ones?
1. Pays your Loans and other Liabilities after your untimely demise.
2. Manages the monthly expenses and budget of your Spouse, Children, and Aging Parents.
3. Funds your children’s education and marriage.
4. Maintains your family’s lifestyle after your untimely demise.
5. Funds any other special need of your family in your absence.
How Traditional Life Insurance benefits you?
1. Traditional Insurance Plans are a guaranteed return plan, where you can expect higher returns along with risk cover.
2. Traditional Life Insurance is a better bet, especially when FD rates are coming down.
3. Investing in Traditional Plans offer you Tax Benefits up to Rupees 46800 under section 80 C.
4. You can enjoy tax-free returns unlike FD, where TDS is deducted from your returns.
5. Traditional plans are safe investment options, they are risk-free in terms of sum assured.
6. These Traditional Plans promotes Savings while you enjoy compounding returns.
7. Investing in Traditional Life Insurance offers you double Tax benefits under section 80 C (Income Tax) and under Section 10 D (Death Benefit).
How much Traditional Insurance do you need?
You might have brought a Life Insurance Policy but you may be underinsured. Suppose, Ram annual income is 12 Lakhs but has a policy worth 2 Lakh only, then Ram is underinsured. He needs a policy worth 1.20 Crores because the general rule says that a person’s Life Insurance Policy sum assured should be equal to his HLV or Human Life value which is equivalent to 10 times his annual income.