Understanding Group Life Insurance

No doubt those traditional saving plans can do better than whole life plans in term of savings like a regular saving deposit account which is offering a valuable interest rate up to 7%. But are they also covering other benefits like tax rebate, risk cover, insurance riders and loan against deposited money?

Many insurance companies may be writing to their customers to ask for proof of their health status and those found to be lying could be made to pay higher premiums or have their policies cancelled all together. Currently insurers reject about 25% of claims because of misinformation.

This hike will be reflected in both term insurance (which covers only risk) and traditional insurance (which provides savings and insurance). Traditional insurance also sees a hike in the service tax, now standing at 3.50%, up from 3% for the first year and 1.75% for subsequent years, up from 1.5%. This increase is bound to reduce the overall return on investment. Traditional life insurance plans have generally been the more popular choice owing to their simplicity and agents managed to sell them like hot cakes. With this hike these insurance policies are likely to die a slow and painful death.

With all the advantages I have listed, why is it that 99 out of 100 financial “gurus” insist that whole life insurance is a lousy place to put your money? Most will recommend you buy term life insurance instead and invest the difference in mutual funds.

There are others who buy life insurance through a deep sense of responsibility. They love their families but they are driven more by the fact that the family relies on them so they have to live up to what is expected of them.

Kortz says that despite the recent market decline, variable life insurance still has a place in a balanced financial plan—but the policyholder needs to be knowledgeable about the risks involved.

According to reports from the representatives at the National Association for Critical Illness Insurance and other organizations, it is estimated that about 90 % of the critical illness life insurance policies tend to be bought for workplace benefits.

Which insurance is good for you? There are two type of insurance, first is term life insurance and second is whole life insurance. Term life insurance protects your family from outstanding debts including mortgage. If you are interested in building cash value over a period, then whole life insurance is the better option

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