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Features
Ref. No. KLI/22-23/E-BB/492
Life insurance bestows your loved ones with financial stability and security in your absence. It empowers you to strategically plan for your family’s future with benefits such as tax advantages, savings opportunities, and the means to achieve significant milestones like funding education or planning for retirement. You work hard to secure a comfortable future for your loved ones, but have you considered how they would manage financially if you weren’t around? Life insurance steps in as a financial shield, ensuring they remain secure. By exploring the many features of life insurance, you can choose a policy that acts as a tool for fulfilling your long-term financial goals.
Life insurance policies come with various characteristics that cater to different financial and personal needs. Let us explore these features of life insurance in detail:
Life insurance confirms that your dependents are financially protected in case of unforeseen circumstances. The payout from the policy acts as a safety net, covering expenses such as education, daily living costs, and debts. For families with children or elderly dependents, this security is invaluable, offering peace of mind that their needs will be fulfilled, even in your absence. The death benefit can help maintain your family’s standard of living, ensuring that mortgage payments, utility bills, and other routine expenses are covered without interruption.
Life insurance features include various policy options, such as term plans, whole life insurance, and endowment plans. Term plans provide high coverage at affordable premiums for a specific period, which is ideal for young professionals or individuals with temporary financial obligations. Whole life insurance ensures lifelong protection, making it suitable for estate planning or leaving an inheritance.
Endowment plans combine insurance and savings, providing maturity benefits alongside coverage, perfect for achieving long-term financial goals like retirement planning or funding a child’s education. Additionally, there are Unit Linked Insurance Plans (ULIPs) that allow policyholders to invest a portion of their premium in market-linked instruments, offering both insurance coverage and investment growth. These are just some of the features of insurance that make life insurance policies versatile and beneficial.
Policyholders can enhance their coverage by adding riders, which are additional benefits that customize the policy. These riders allow you to tailor your policy to address specific risks and needs, ensuring comprehensive coverage. Some popular riders include:
Payments made toward life insurance premiums are eligible for tax deductions under Section 80C of the Income Tax Act, with an upper limit of ₹1.5 lakh annually. The maturity benefits and death payouts are tax-exempt under Section 10 (10D), provided certain conditions are met.
These tax benefits make life insurance a dual-purpose investment, offering both financial protection and tax savings. For individuals looking to maximize their financial planning, life insurance serves as a smart addition to their financial portfolio.
Many features of life insurance policies, such as endowment plans and money-back policies, offer maturity benefits that act as a savings tool. These benefits can be used to meet significant financial milestones, like buying a house, funding higher education, or starting a business. Unlike other investments, these savings come with the added advantage of insurance coverage throughout the policy term, ensuring your family’s financial security.
In the case of ULIPs, the maturity value depends on the activity of market-linked funds, delivering the potential for higher returns over time.
Certain policies include or allow for critical illness coverage, ensuring financial support if the policyholder is diagnosed with a life-threatening disease. With the rising costs of healthcare, this feature provides a significant safety net, covering expenses such as hospital bills, treatments, and post-recovery care. Having this coverage means you can focus on recovery without worrying about draining your savings or compromising other financial goals.
Policyholders can borrow against the surrender value of their life insurance policy. This feature provides financial liquidity during emergencies, such as medical expenses or urgent family needs, without liquidating other assets. The loan terms are often more favorable than personal loans, with lesser interest rates and flexible repayment options. This makes it a convenient way to access funds while keeping the policy active.
Life insurance is a multifaceted financial instrument that offers policyholders a comprehensive package of benefits, ranging from long-term wealth creation and tax advantages to enhanced security through add-on features and riders tailored to individual needs. By leveraging these benefits, life insurance becomes an essential part of comprehensive financial planning, helping you achieve both immediate and long-term objectives.
Life insurance is essential for anyone looking to safeguard their family’s future. It ensures financial independence for your loved ones, pays off debts and supports long-term goals even in your absence. Without life insurance, your family could face economic challenges that could disrupt their quality of life. Additionally, features of life insurance serve as a financial cushion during challenging times, allowing your loved ones to focus on emotional healing without added financial stress.
Before purchasing a life insurance policy, consider the following:
Selecting the right life insurance policy is about meeting immediate financial needs and creating a safety net for your family’s future. As you explore your options, start by identifying your unique financial goals, whether they involve securing your child’s education, covering healthcare costs, or leaving a lasting legacy. Avoid common pitfalls like underestimating your coverage needs or skipping the fine print of policy terms.
To move forward confidently, consider consulting with a financial advisor who can offer tailored recommendations based on your lifestyle and priorities. Regularly review your policy to ensure it evolves with changes in your life, such as marriage, the birth of a child, or retirement.
1
The key purpose of life insurance is to deliver financial security to your dependents in case of your untimely demise, ensuring their financial needs are met.
2
A life insurance policy requires paying regular premiums to the insurer, who, in return, offers a payout to the nominee in the instance of the policyholder’s demise or upon policy maturity.
3
Term life insurance features pure risk coverage for a specified period. It offers high coverage at low premiums but does not include maturity benefits.
4
Whole life insurance offers lifelong coverage with maturity benefits, while term life insurance offers coverage for a specific period without maturity payouts.
5
Yes, certain features of life insurance plans, like endowment plans and unit-linked insurance plans (ULIPs), combine insurance with investment opportunities, allowing policyholders to grow their wealth while enjoying coverage. Additionally, features of insurance make it a versatile tool for addressing diverse financial needs and planning for future contingencies.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Features
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
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