Life insurance is a very broad category, and of course, you should know that it is a necessity for every home. However, selecting the right policy is a matter of great importance since it will be a key life decision without a doubt. Should you opt for a term life insurance plan or other life insurance plans? It all depends on your specific circumstances and needs. Let’s take a closer look below.
When Should You Consider a Term Insurance Plan?
A term insurance plan is a great move anyway if you want high life insurance coverage for your family’s future protection. Some of the main aspects worth noting include:
- You can choose high life coverage, unlike other life insurance plans with investment components. It may offer moderate life cover along with savings or investment benefits.
- The premiums are more affordable and lower for high coverage as compared to other life insurance policies since there is no cash value or investment component.
- You can start early and lock in a low premium for a higher coverage amount for a long and convenient tenure (up to 30-40 years or even whole life, depending on the plan). Some plans allow you to increase coverage at specific life stages, such as marriage or childbirth.
- You can also opt for riders to enhance your plan for a nominal premium over and above the amount for the life coverage.
Among various term insurance options available in the market, Kotak e-Term Plan stands out as a reliable choice, offering extensive coverage at an affordable premium, with the flexibility to customize your policy as per your needs.
What are the Key Aspects of Other Life Insurance Plans?
There are several other kinds of life insurance plans such as ULIPs (investments in equity/debt funds with life coverage), retirement plans (investment in various instruments with life coverage), child plans (multiple investments with payouts for a child’s education goals and life coverage), and endowment and guaranteed income plans, to name a few. Some common features include:
- These policies include maturity payouts, investment, and cash value aspects, with the exception of pure protection types that lack survival benefits.
- They differ in risk level from negligible (in assured return schemes) to low and even high.
- You can earn moderate life cover as well as investment returns.
- Market-linked plans such as ULIPs have investment management fees, while endowment and guaranteed income plans have more premium charges because of guaranteed returns.
Which One Should You Choose?
Though a combination of insurance and investment is always appreciated, you must first consider purchasing a term life insurance policy. This is because it will give you the highest possible coverage that you can afford at a lower premium. Kotak e-Term Plan is an excellent choice for those looking for comprehensive coverage, flexible payout options, and a smooth online purchase experience.
Once you have secured your family financially, you can go for supplementary life coverage with other plans that have investment components. The latter will be the focus here, depending on your risk level. From ULIPs and child/retirement plans to guaranteed income plans, you can align them all to your future objectives and build a solid portfolio.
Hence, you should first opt for term insurance as a financial safety net for your family and then build on the foundation with other life insurance plans and a mix of investments in varying market instruments. Of course, it is worth noting that all life insurance plans come with tax benefits, depending on specific conditions, such as premium limits under Sections 80C and 10(10D), and may not apply in the new tax regime unless the old regime is chosen.
