Life Insurance

Life insurance policy was bought to make you and your family life more secure in case of financial emergencies. This policy proves to be beneficial whenever you meet a difficult situation to deal with. Which can arise if you are no longer present to support your family. It works as an income source if you are permanently disable.

Also if you have reached that stage of life where you need monetary support and security on urgent basis. This broadens your financial planning and favourable in tax savings.

The goal of life insurance is to provide a measure of financial security for your family after you are no more. So, before purchasing a life insurance policy, you should consider your current financial situation & loan liabilities, if any and the expected standard of living for your dependents or survivors. It is prudent to re-evaluate your life insurance policies annually or when you experience a major life events like marriage, divorce, the birth of a child, or purchase of a major item such as a house or business. Keep in mind that your life insurance cover should not be less than your outstanding loans at any given point, as you would never want your family to run around to repay the loans. So higher the loans higher should be your insurance cover.


 Term Insurance Plan Child Plan Retirement Plan Investment Plan

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Types of Life Insurance

Below are the basic types of life insurance policies. All other insurance policies are built around these insurance policies.

  • Term Insurance
  • Child Plan
  • Retirement Plan
  • Investment Plan

Term Insurance is the easiest way to keep your family safe and secure under all circumstances. Your family deserves the best, even when you are not around. A Term Insurance plan provides life coverage for a defined time period.

- A Term Insurance is the most important policy one should have, especially if there are dependents in the family.

How Much Cover Should I Take?
A general rule to be followed while calculating a term Insurance policy is:
Sum Assured (Minimum) = Annual Income x 10 times + Loans/Liabilities
The amount of Term Insurance coverage you need will depend on many factors such as:
  1. Number of dependants you have in the family.
  2. The city you live in and the kind of lifestyle you wish to have.
  3. Funds required for children’s higher education and future.
  4. Your affordability in terms of payments and also your investment requirements.
  5. Your current and future expenses, loans and investments.
Types Of Term Cover
  1. Pure Term Plan – Payment of lump sum on death
  2. Increasing Term Cover – The amount of coverage increases every year till sum assured doubles up.
  3. Increasing Monthly Income – A regular monthly income plan for your wife to assure a fixed income every month
  4. Return of Premium- A new term insurance in the market where the money is returned in case of survival, but the premium is on the higher side
  5. Increasing Term Cover with age to protect from inflation
Term Insurance Facts
  • Term coverage is the easiest and the most affordable means to protect your family
  • Buying a Term Insurance becomes more expensive as you age
  • People with home loan should have a higher life cover
  • Tobacco consumption makes your plan expensive by 30-40%
  • An online term plan will cost Rs 8090 for Rs 1 cr Sum Assured, for a healthy 30 year old male.
Who can be the NOMINEES:
  • Spouse, Parents or Children
  • Other dependents
  • Usage of MWPA (Married Women Property Act) is a good way to ensure that your wife and children get the complete tax free benefit of the policy when you are not there
What exactly is a Child Plan?
If you survive the policy period –
You pay premiums, the plan pays a fixed maturity at a fixed age of your child in tranches or lump sum as you decide. Fixed maturity at fixed age is very crucial as your child will need funds for higher education at a specific time period.

If you do not survive the Policy period –
Full Insurance cover is immediately paid to the family, future premiums are waived off and the plan pays a fixed maturity at a fixed age of your child in tranches or lump sum as you decide.
Education cost in India will triple in the next 15 years. So are you prepared?
Probable Increase in course fee over next 15 years


Cost In Lacs 2015

Cost In Lacs 2030

School Fee for 1 Year



Engineering fee for 4 year course



MBA Fee for 2 Year Course



Commercial Pilot Course Fee


2 Cr

MBBS Fee for 4 Year Course



Why should I invest in a Child Plan?
Child Plan is the only plan that guarantees funds for your child’s future even if the parents are not there. The design of the plan is such that the plan pays double in case the parent meets with an eventuality.

Things to consider while investing in a child plan
  • You should be covered not your child
  • Premium Waiver has to be inbuilt in the plan , if not that additional riders are available
  • Start Early, planning for a 10 year old is futile as years left for money to grow are less. 1-2-3 yrs is the ideal age
  • Choose a staggered maturity as lump sum money can be spend on some other less important purpose
Please disclose all medical conditions while applying.
If you are reading this then you are probably among the 90 % new age Indians who have absolutely no retirement support called Pension.
India’s 60+ populations will become 300 million by 2050 from 100 million today. Imagine the scenario when you will be one of those 300 million people with no source of income.

The Indian Government is facing a huge fiscal challenge to provide pension/support to private sector retirees. The existing pension schemes are good for organized workforce that forms about 10% of the total working population. Approx 92% of population working in private sectors is refrained from social security. Only 7-8% of them are covered by pensions

Why having a pension is vital when you retire?

Your average work life is of 30-35 years. But what about 30 years of life post retirement when you won’t have any income? The increasing disorganization of joint family system due to urbanization is leaving more families insecure, vulnerable and devoid of social security.

Sudden increase in life expectancy is responsible for the growing retired population of India. The happiness of living long doesn’t come alone. Increased longevity also means more money is required to meet requirements

Got a job Start planning for Retirement

All of us get bogged down with immediate expenses like housing EMIs, Rents, Car EMIs or child’s education. These expenses are inevitable same is retirement. Start as early as possible and invest at-least 10 % of you income for retirement. Earlier you start better the compounding effect.

What are the options of Investment plans In Life Insurance?
Money-back Plans - Get Bullet Payments at fixed intervals to fulfill short term goals like a foreign trip or a car and get a lump sum at maturity

Regular Income Plans - Create a 2nd Income for your family by investing for a short term
Short term Investment Plans - Invest for a short period when you don’t have too many expenses and reap the benefits in a long term

ULIPS - Invest in plans with high growth potential and investment opportunity in equity and debt markets

Wealth Creation - Invest small amounts for a long period and see your money grow leaps and bounce

Immediate Pension - Special product for Senior Citizens where pension starts immediately after investment

Why choose life insurance plan for investments?
I am sure you would have broken a FD or withdrawn from a mutual fund and later thought was it really necessary. Life insurance plan have exit loads hence withdrawal or discontinuance attracts penalty. Life insurance plans offer long term compounding benefit which not other investment offers as investment horizons are not more then 5- 10 years in other investments

Some Useful tips for investment
  • Do not look at the amount of death cover in a plan , look for the return to investment
  • For life cover buy a term plan
  • Only invest the amount that you will not require for 20-30 years, don’t stretch
  • Keep you long term goal clear and don’t get confused in between the term
  • Life Insurance investment is not meant for short term planning
ULIPS Interesting Facts
  • A ULIP beats mutual funds returns if the investment horizon is 15 years +
  • Fund management charges in ULIPs are half of that of mutual funds Eg. Equity ULIP fund charge 1.25 % Equity Mutual fund Charge 2.25%
  • Average return of a equity ULIP fund is 16 % , if you invested in 2005 and stayed in the fund till 2015
  • ULIP’s provide dual advantage of returns along with life cover
ULIP Child plans will come in handy if your child has crossed the age of 7–8 Years

For right estimation get right advice from RightPolicy experts. We wish you to have good time with your family.