What is Life Insurance?

What is Life Insurance?

Life Insurance is an agreement between a policyholder (you) and an insurance company, where the insurer promises to pay a fixed amount of money (called Sum Assured) to your family or nominee if you (the insured person) pass away during the policy term.

👉 In simple words: Life Insurance provides financial protection to your family in case of your death.

🎯 Why is Life Insurance Important?

1. Provides financial security for your family.

2. Helps pay for children’s education and marriage.

3. Covers outstanding loans or debts.

4. Offers tax benefits under Section 80C & 10(10D).

5. Helps in retirement planning and long-term savings.

📌 Types of Life Insurance Policies

1. Term Insurance

   • Pure protection plan.

   • Cheapest option, high coverage.

   • Only death benefit (no maturity benefit).

2. Whole Life Insurance

   • Coverage for the entire lifetime.

   • Payout to family after death.

3. Endowment Policy

   • Combination of insurance + savings.

   • Death benefit + maturity benefit.

4. Money Back Policy

   • Periodic returns during the policy term.

   • Good for regular income needs.

5. ULIP (Unit Linked Insurance Plan)

   • Insurance + market-linked investment.

   • High risk, high return option.

💡 Who Should Take Life Insurance?

• Salaried individuals

• Business owners

• Anyone with dependents (family relying on your income)

• People with loans (home loan, personal loan)

• Parents planning for children’s future

👉 In short: Life Insurance is not for you, it’s for your family’s financial safety when you’re not around.

Author: Kaushal kumar