WHY TO PAY MORE PREMIUM FOR LIFE INSURANCE

IN Insurance industries there are many kind of plan basically 1} Term plan 2} traditional plan {endowment} 3} U. L. I. P.{unit link insurance policy}

Endowment plan you get a sum assured + bonus at the time of maturity

U. L. I. P. You Pay for a term plan and rest amount add to your fund after deducting company charges + levies + fund management charges {f.m.c}and other charges. your insurance charges are deducted on monthly basics from your fund.

term plan you only get paid when the insured person die. if the person survive within term of policy or at end of term he cant get any refund of premium paid. no profit / bonus all paid premium are not refunded.

now to the point either endowment or u.l.i.p you pay for a specific amount of sum assured to company after deducting charges will allocate the balance amount to you fund or accumulation account {for endowment plan}.

In endowment plan companies are not bound to be specific of their investment.
Investment is always mystery. In u.l.i.p plan you can get even daily updates.
If you opt for u.l.i.p insurance company charge their allocation charges, administration fee, handling fee, etc a part you have to pay like a mutual fun f.m.c charges etc. Then why not directly buy a mutual fund and save additional charges.

In finance market there are lots of investment option which can pay you high returns than endowment or a u.l.i.p insurance plan. {ex; gold, government bonds, property, recurring deposits, fixed deposit, even direct choice of mutual fund. etc}

Advantage of term plan is you get high risk cover at very low premium. {ex; Rs. 20 lack sum assured} for age of 30 years yearly premium Rs. 5000/- to Rs. 7000/- premium vary company to company.
At same time you can compare what you pay for a same amount of endowment / u.l.i.p plans.

If you save balance amount in other options definitely you will get high returns than you get in endowment / u.l.i.p plans.

now a days few companies are offering good term plan with all refund of paid premium its a kind of combination or a type of endowment where you get your premium paid back and cover for whole life or specific period depends upon plan terms and condition. any how this premium are high than pure term plan.

you can even opt for riders like accident benefit, critical illness etc with term plan also.

so next time buy a term plan invest rest of balance premium to other options of investment where you can get good returns.

after all insurance is security and surety for our near and dear ones

this article will help you save premium paid for life insurance and get good returns from other options.

ARTICLE WRITTEN BY KETAN J MEHTA