What is a life insurance policy? What are its advantages and disadvantages over other types of insurance plans?

[ritikasharma]

A life insurance policy is a contract between you and an insurer where you pay premiums, and in return, your family gets financial support in case of your passing.

Advantages over other insurance plans:​

Provides financial security for your loved ones
Tax benefits under Section 80C & 10(10D)
Some plans offer investment + insurance benefits
Can be used as collateral for loans
Riders like critical illness & accidental cover enhance protection

Disadvantages:​

Higher premiums compared to health or motor insurance
No immediate benefits unless it’s an investment-linked policy
Some policies have long lock-in periods & complex terms


Overall, if you have dependents, life insurance is a must for financial stability.

 

[MEGHA20]

A life insurance policy is a contract between an individual and an insurance company, where the insurer provides a lump sum payment to beneficiaries upon the insured's death, in exchange for regular premium payments.

Advantages:​

• Financial security for dependents.
• Tax benefits on premiums and payouts.
• Savings & investment options in some plans.

Disadvantages:​

• Higher premiums compared to other insurance types.
• Limited liquidity, as funds are locked until maturity or death.
• Complex terms that may require careful evaluation.

Compared to health or property insurance, life insurance focuses on long-term financial protection rather than immediate risk coverage.

 

[sonali_negi]

A life insurance policy is basically a financial safety net. It gives your loved ones a lump sum amount (called the sum assured) in case something happens to you. I didn’t think much about it earlier, but after I started working and became more serious about responsibilities, I felt the need for some kind of security for my family.
Last year, I bought a term life insurance plan through Policybazaar. It was easy to compare options and understand which plan fit my needs and budget. What I liked most was that term insurance is affordable and gives high coverage.
Advantages:

• Peace of mind: I know my family won’t have to worry financially if I’m not around.
• It’s much cheaper than other types of insurance with investment parts.
• Policybazaar made it easy to buy with just a few clicks and clear info.

Disadvantages:

• Unlike health or car insurance, it only comes into play after death.
• And term insurance doesn’t give any money back if you survive the policy term, some people may not like that.

But for me, it’s not about getting something back. It’s about making sure my parents are taken care of if I can’t be there for them.
Hope this helps someone who's confused like I was!