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  Financial Planning

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home > Financial Planning > Services > 7 Facets of FP > Insurance Planning
logo   7 FACETS OF FINANCIAL PLANNING
   
bullet INSURANCE PLANNING
 
Insurance is a contract of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policyholder a sum of money upon the occurrence of a specific event. Insurance helps to reduce adverse consequences of the loss of assets. It can be classified into life insurance and general insurance.
   
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Life Insurance
 
A human life is also an income generating asset and this asset is exposed to early death or living long. Death takes away income and old age reduces or takes away income and therefore one needs to be insured to adequately cover these risks. Insurance serves as a cover against uncertainties like death and financial losses and is an effective investment and tax saving tool.Hide
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General Insurance
 
It is mainly to insure against accidental occurrences called perils like fire, thefts, lightening and earthquakes etc. The general insurance for individuals includes motor vehicles, homes, accident & health and travel insurance policies.Hide
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Insurance Planning
 
It is an important feature of financial planning which aims at providing customized advice to suit the needs of a client and cover his/her risk. It is concerned with ensuring adequate coverage against insurable risks. It calculates the optimum level of risk cover which is a specialized activity, requiring considerable expertise. Insurance Planning therefore enables the client to get the best policies which are tailor-made so as to make the purpose of getting insured more purposeful.Hide
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Types of Life Insurance Policies
 
Term Policy
Term life insurance provides a death benefit if the insured dies. Term insurance does not accumulate cash value and ends after a certain number of years or at a certain age.

Endowment Policy
This is an insurance policy where the assured has to pay an annual premium which is determined on the basis of the assureds' age at entry and the term of the policy. The insured amount is payable either at the end of specified number of years or upon the death of the insured person, whichever is earlier.

Whole Life Policy
A type of life insurance that offers a death benefit and also accumulates cash value, tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life insurance.

ULIP
It is a policy which provides for life insurance where the value at any time varies according to the value of the underlying assets at that time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV).

Children Policy
Policy is taken on the life of the parent for the benefit of the child. By such policy, the parent can plan to get funds when the child attains various stages in life.

Pension Plans - Annuity Plans
All Insurance Companies have Pension plans. One should start saving during active life to provide regular income during old age. Financial independence during old age is a must for everybody.
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  For more details on Insurance Planning visit our  Insurance Website 


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