Considering life insurance plans for your portfolio? You should purchase it without any delays since it will secure your family financially and give you peace of mind (in case something unfortunate happens). There are several kinds of such plans available and you should endeavor to choose the one that matches your financial objectives in the best way. This is a guide that will help.
Choosing the Best Life Insurance Plans for Your Specific Goals
Here are some pointers towards choosing life insurance plans based on specific future financial goals.
- Retirement Security- If you’ve been eyeing adequate financial security at the time of retirement, then you can opt for a pension plan offered by insurance companies. They offer life insurance coverage along with an investment component to accumulate funds for retirement. Upon maturity, a portion of the corpus can be withdrawn as a lump sum, while the remaining amount must be used to purchase an annuity that provides regular income. This ensures financial stability post-retirement.
- Creating Wealth- If wealth creation is your main mantra and you’re okay with taking high to moderate risks, ULIPs (unit-linked insurance plans) can be your go-to option. They offer the dual benefits of life coverage and investment returns. You can choose a mix of funds to invest in, and the returns compound over the long term, helping you beat inflation and build wealth. However, ULIPs come with various charges, such as mortality and fund management fees, which can impact net returns. Most ULIPs offer a limited number of free fund switches per year, allowing you to adjust your investments based on market fluctuations and changing goals.
- Legacy Planning- If you wish to leave behind a legacy for your loved ones, then you can opt for options like whole life insurance policies, which provide lifelong coverage and may come with bonuses if they are participating policies. Another option is a guaranteed income plan, which offers fixed payouts after maturity, for a defined period or lifetime, depending on the policy terms. However, not all whole life policies provide survival benefits, and guaranteed income plans may not always include a death benefit.
You can also consider term insurance if your primary objective is securing high life coverage at an affordable cost. Term insurance ensures financial protection for your family in case of your demise during the policy period. However, it does not offer any maturity benefit unless a return of premium (ROP) rider is chosen.
Select the Best Life Insurance Plan for Your Needs Today
As you can see, there are various kinds of life insurance plans that you can choose from, depending on your specific financial objectives. You should first define your goals clearly and then compare the features of multiple plans before deciding on the right one. Whether you are planning for retirement, securing your children’s education, or building a legacy, there are insurance products tailored to different needs. However, for goals such as children’s education or retirement savings, other financial instruments like PPF, mutual funds, and the National Pension System (NPS) may also be more suitable alternatives.
Do not put off life insurance any longer—evaluate your needs and choose the right policy to secure your family’s financial future. At the same time, it is also important to select a plan that aligns with your financial objectives seamlessly.
