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What is life insurance?

Life insurance is a type of contract through which a person has to pay a small amount (premium) to the insurance company to take care of his financial security and the future of his family. In return, according to this contract, if the person dies, or some unexpected illness or accident occurs, the insurance company pays an amount (sum assured) to the family members of that person.

This contract provides financial protection to face the uncertainties of a person's life. By taking out life insurance, the family gets the necessary financial assistance without facing financial difficulties due to the sudden death or accident of the earner.

IRDAI's new rules in 2025
 

• In 2025, IRDAI (Insurance Regulatory and Development Authority of India) has made some important changes in the life insurance sector which are beneficial for the customers
   
• Earlier, only 33% of the amount was allowed to be withdrawn after retirement under pension schemes, but from 2025, 60% of the amount was allowed to be withdrawn, which can be used as capital for financial needs after retirement.
   
• Some schemes also offer the facility of withdrawing 25% of the amount three times after a lock-in period of 5 years, which makes it possible to withdraw funds according to financial needs.
   
• Investment options have been increased in ULIP (Unit Linked Insurance Plans), and investment in shares has been allowed to be made in large quantities, which increases the possibility of returns.
   
• Flexibility has also been given in terms of paying premiums. If you pay regular premiums for 5 years, then the insurance policy remains valid even if the premium is reduced by half later.

Why is life insurance necessary?

1. Nowadays, many types of uncertain events can happen in life - accidents, serious illnesses, or sudden death can have a big impact on the household finances. Therefore, taking life insurance is an important tool for financial security.
    
2. Your sudden death or accident provides financial support to the family.
    
3. Funds are available for house rent, loans, children's education and daily expenses.
    
4. Pension planning also provides financial relief after retirement.
    
5. IRDAI's new rules offer more flexible plans, which make it convenient while taking insurance and using money.
    
6. Tax benefits are available, which make insurance plans even more profitable.

What are the points to consider while choosing a life insurance plan?

• What are the financial needs of your family? (Retirement, Education, Loan Repayment)
• Do you just want protection or do you also want to save?
• Consider the reliability of the insurance company, claim settlement speed, service.
• Choose the right plan according to your financial income and ability to pay premiums.
• Use riders that provide additional benefits (such as accident protection, critical illness protection).

Advantages:
 

• Your family gets financial security.
• Do not get into debt or trouble due to sudden death or disasters.
• Opportunity to get consistent income with pension after retirement.
• Tax benefits and investment benefits at the same time.
• Flexible use of money possible at the right time.

Disadvantages:
 

• Insurance premium must be paid monthly or annually.
• Some plans can be expensive.
• Term plans only have a death guarantee, no return.
• There is a risk of losing money in risky investment plans.

Life insurance is not just an option for financial protection but it is a very important part for the future financial security of the family. With the latest rules, it has become more sensitive, flexible and easy to use. Therefore, it is necessary to choose the right life insurance plan according to your needs and financial capacity with the right information.

Why buy insurance with Finshak?
 

• Finshak compares the best plans from trusted insurance companies for you.
• Here you get insurance information and advice in simple language.
• Finshak provides guidance to make the claim process easier and faster.

Fill the contact form to get personalized guidance!