Insurance Loans24: ECONOMIC LIFE INSURANCE

GIVE LIFE INSURANCE ITS DUE IMPORTANT

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 For all
those who have financial dependents , life insurance is a must. Life  insurance acts as a tool for income  replacement. The idea is to not make the
surviving  family members suffer
financially  due to the absence of bread
earner.  Its do not enough to keep the
family maintain their standard  of living
life  insurance ensures  much beyond it. There are a financial
liabilities  towards, children which one
needs to meet., Life  insurance  makes sure such goals are met
systematically  and dreams and
aspirations of children are not 
compromised . In addition if there are housing  and car loans , life  insurance serves  it role in managing  them as well. In simple  terms, life 
insurance company, ensures your family 
doesn’t  suffer financially and
all your  goals  are met for a small price by paying a premium,
that your pay to ensure it.   THE
PRODUCT  RANGE:  Life 
insurance products help in channelizing 
your savings  systematically into
various assets for generating returns over the 
along term. As wealth  gets
disciplined  savings are goes a long way
in meeting  the long term financial  goals. 
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On one  end of the
spectrum are the pure the term  insurance
plans. They solely  cover the risk of the
dying. Nothing is paid  on maturity I.e.
on surviving  the policy will replace the
income  that will cease  to accrue. Then there are a  traditional 
insurance plans including 
endowments  and money back plans
which are a  ideally suited  for conservative  individuals 
looking  to bundle savings with
protections . On the far end is </div>
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the market linked investments  cum protections plan called until linked  insurance plan ideally suited for a   those looking for a bundling  and exposure 
to equities as asset  class for a
higher that inflation  kind of returns.
Besides protection   insurance,
products  with savings elements  helps in meeting one’s  long term goals such as kids  education 
marriage  or even retirements .
Market linked  insurance products
having  equity  exposure 
comes handy in this as equities are said to work best over long term as
against  other asset classes in
delivering  higher than inflation
adjusted  returns. Link your savings in
these unit linked  insurance plans to
long term goals. Be exposed  to
equities  till about three years  away from goals  and </div>
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then start shifting funds from equity  fund options to less volatile debt funds.
This helps in protecting  the gains
made. </div>
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LIFE STAGE BUYING: Buying  insurance is not a one time affair.  The 
insurance need changes as per life stage and one should provide for each
one of them. Reviewing  requirements  at every life stage or after 5 years  helps. For those who are single or have
recently  started career, the
immediate  need might not be there unless
there are a financially dependents 
parents or siblings ,. However even for them buying   insurance early in life helps in keeping the
premiums  low because of age and medical
9issues  connected  with higher ages. As one move up the life
stage., gets married and have children, the 
insurance need rises. Keeping and adequate coverage not only helps
family maintaining  the same standard of
living but also helps in achieving 
certain  life goals such as kid’s
education or marriage.  Since education
is the prime concern for most Indian parents, investing  in a child plan will ensure that the
education of your kid goes unhindered 
whether or not you are a around. Its is a  very likely 
that during this  period, one
takes a home loan and adds on the exiting 
financial liabilities. Getting 
not just the home loan insured 
but also any other form of loan such as a car or personal loan is a
must.  The value of the human life is
unlimited. Still most of us consider  it
enough  to keep a life cover of Rs. 2
lakh- Rs. 5 lakhs  or Rs 10 lakh . Will
it suffice ? Will such amount be enough to replace one’s  income be enough to replace one’s income  for the next several years? No wonder we at
most times are under-insured during  our
life time.  GET REAL VALUE OF YOUR LIFE:
Human life value (HLV) approach to calculating 
the  insurance requirements  takes into a account  four factors annual income, annual
expenses  years to retirements and
inflation adjusted cost of  expenses.
From these  factors a reasonable accurate
assessment of the value of your income can be made. First  deduct all your personal expenses  such as a food, clothes, travel,
entertainments  from your annual income
after deducting personal expenses  is
what your family consumes. Second see how many years of earning  are left your retirements  age minus your current age.  Project 
family expenses up  to
retirements. Add non-recurring expenses , like your children’s  higher 
education  or their marriage. The
shortfall is   <br />
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what you should 
insure for. Third calculate  the
present value of the shortfall allowing for a reasonable  rate of inflation . You may deduct
existing  life coverage and account  for any debt such as a  big ticket 
home loan to arrive  at a more
reasonable  HLV figure.  CONCLUSION: Link your life  insurance to your goals. Choose between
traditional and Ulips based on your requirements and understanding  of the products. Do not invest in any of term
unless you have a basic understanding of how these products the  work. Once</div>
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 bought  run them will till maturity and refrain  exiting 
earlier  as a it would  turn costly 
in surrendering </div>
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before the term ends. 
As a thumb rule, keep life coverage of at least ten times, of your  annual income. Above all, ensure you are a
not under insured  as that would be the
biggest mistake in your life. ...</div>
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GIVE LIFE INSURANCE ITS DUE IMPORTANT

For all those who have financial dependents , life insurance is a must. Life insurance acts as a tool for income replacement. The i...

ECONOMIC USES OF LIFE INSURANCE

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<span style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Following </span>are the different
economics uses of the Life insurance</div>
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 1: 
Financial security: Life insurance provides financial security to the
family. An untimely  and premature death
of the bread winner result in a great financial problem to the family. If no
security provision is made by the breadwinner to meet such this situation., his death  would make the family destitute. They will
become a burden to the society. Life insurance is the best instrument to
provide security in the event  of happening  of such contingency.<br />
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2) Savings: Life insurance is also a potent
instrument for savings. </div>
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 3) Dreams come
true: Every person lives in dream  dream
of very high education for children very decent marriages to daughters  etc. Life insurance makes such dreams come
true even if they dreamer is no more. </div>
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 4)  Collateral of Security : Own
shelter has become an  essential to
everyone. Many institutions offer mortgage loans for purchase  construction of  a house/ flat/ Life insurance acts as a
collateral security  in respect of the
such loans. Without such security the same shelter
considered  an asset as long as the house
purchaser is alive, will become a liability to the family if he dies before
repayment of the entire loan. To repay the outstanding loan, the property will
have to be disposed off. Circumstances. will make  it a distress sale and it will fetch much
less than its reasonable market value. </div>
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 5)  Financial Independence: Life
insurance provides financial Independence 
in old age. The lumpsum maturity value of a policy when received  can be invested to yield interest  sufficient 
to meet expenses after retirement from work life. Or the same  money can be utilised to  purchase an annuity. While  still young, an individual  can purchase a deferred annuity  and fund the same in easy instalments. </div>
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 6) 
Protects Creditors: Organizations 
or  individual  who are in credit business, can ensure  for themselves  recovery of loan  when a 
debtor dies. The can obtain a group 
individual  life insurance   policy on then lives  of debtors. So that if a  debtor 
dies, the policy proceeds will repay the 
outstanding  loan. </div>
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 7) Protects Partnership firm: A Partnership
firm can insure the lives of the partners to the extent of capital invested by
each  in the business. In case of the
death  of the partner  the danger of withdrawal of capital by the
legal heirs of the deceased   partner can
be met from the processed  of the policy.
Otherwise  there is the risk of financial
problems for the partnership business.  </div>
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8) Provides  fund for replacement:
Under key man insurance  an
organization  can insure the lives of
executive whose expertise greatly 
contributes  to their profits. In</div>
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 case  of
the death  of a key man, the money
provided by the insurance can be utilised 
to recruit  a new person who is equally
capable as a replacement.</div>
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 9) Improves 
productivity:  Organization  can purchase group life insurance policies as
part of the their employee– welfare program. This acts as a  morale booster to the workers and result in
improved production. <b><o:p></o:p></b></div>
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ECONOMIC USES OF LIFE INSURANCE

Following are the different economics uses of the Life insurance 1: Financial security: Life insurance provides financial security ...

CHARACTERISTICS OF LIFE INSURANCE

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<span style="font-family: Calibri; font-size: 11pt;">The following characteristics  of features in life insurance may be deduced from the aforesaid definitions</span></div>
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<span style="font-family: Calibri; font-size: 11pt;">: 1) Offer and acceptance: Like other contracts of insurance the life insurance  contract is also  the outcome </span><span style="font-family: Calibri; font-size: 11pt;">of an offer made by the policy owner and its acceptance by  the insurer. Generally the  life insurance  is a  contract is made in waiting. </span><br />
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<span style="font-family: Calibri; font-size: 11pt;">2) Agreed sum of money: The insurer agrees to pay a  certain sum of money either on the death of policy owner  or on the maturity of the policy whichever is earlier </span></div>
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<span style="font-family: Calibri; font-size: 11pt;"> 3) Premium: The policy  owner is liable to pay periodically the amount of the payment in the form of premium till the death of the policy owner or expiry of the period of policy  whichever is earlier</span><br />
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<span style="font-family: Calibri; font-size: 11pt;">4) Not a contract of indemnity: Life insurance contract is a note a contract  of indemnity as the loss caused by the death cannot be measured in terms of money is a compensation for loss of the one’s life. 5)  Insurable interest: In life insurance  insurable interest must exist when the claim. The person who has been assigned  a life policy  need not  have insurable interest in it as the insurable interest was already present at time of taking policy.</span><br />
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<span style="font-family: Calibri; font-size: 11pt;"><br /></span><span style="font-family: Calibri; font-size: 11pt;"> 6) Lending helping hand: Life insurance  provides helping hand to those  who are left support less and  helps financially in case of the death of the insured. It is also considered to be than the best alternative for making savings. </span><br />
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<span style="font-family: 'Calibri'; font-size: 11.0000pt; font-weight: bold; mso-spacerun: 'yes';">7) Covers other risks: Life insurance covered  others risks which are connected with the  human life in addition  to the risk of death. For example, total and permanent disability  or temporary disability and medical expense compulsory retirement or the  economics death risks etc., have also  been covered  under the purview of Life insurance these days. 8) Relief  sword of damocles: Life insurance relieves  the insured  from the sword of damocles  i.e.., various risks and uncertainties  which may occur before and after  the death of the insured</span><br />
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CHARACTERISTICS OF LIFE INSURANCE

The following characteristics of features in life insurance may be deduced from the aforesaid definitions : 1) Offer and acceptance: Li...

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GIVE LIFE INSURANCE ITS DUE IMPORTANT

ECONOMIC USES OF LIFE INSURANCE

CHARACTERISTICS OF LIFE INSURANCE

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