Death is inevitable, but its timing is uncertain. So, if you are earning for your family, it is essential to insure your life against death. Premature death can cause your family financial loss. Moreover, living too long can also cause you a financial strain if you have not had effective retirement planning done. This is where a life insurance policy comes into the picture.
What is Life Insurance?
Life Insurance helps you in financial planning. It is an instrument to meet your short-term and long-term financial goals while providing a financial shield to your family in case of eventuality.
A life insurance policy covers you for a specific amount and up to a specific tenure. If you happen to die within the duration of the coverage, life insurance provides financial assistance to your family. On the other hand, if you survive the policy tenure, then also most life insurance plans would pay a financial benefit.
For example, say you buy a life insurance policy of INR 50 lakhs for 20 years. In case of death within 20 years, the policy would pay the entire amount of INR 50 lakhs to your family so that they can manage the financial loss that they have suffered. Alternatively, if you survive those 20 years and the policy covers survival, you would get a maturity benefit in most plans.