Everyone regardless of their age needs life insurance. It is more important for the bread winner of any family.

Life Insurance is a contract between the insurance company (insurer) and the policyholder (insured), in which, in return for a consideration (the premium) paid by the insured, the insurer promises to pay a specified amount to the insured on the happening of a specific event such as death, disability or critical illness.

Life Insurance helps secure the future income for the family even in the absence of their bread winner and thus securing their present life style and their future dreams.

A mutual fund is a financial instrument that collects money from several investors like you, and invests it in various investment options like shares, bonds, etc.

Depending on where your money is invested, mutual funds can be classified into three types: Equity, Debt and Hybrid.

An equity fund is a mutual fund that invests principally in stocks.

• Life is full of uncertainties. We face various risks in our day to day life including risks to our life, health, property and so on.
• We don’t know whether something unfortunate will happen to us or when, but it is certainly possible for us to take measures to reduce the financial impact of these risks and protect ourselves financially.
• Such financial security could come with savings and investment but these merely give back our own money and some returns.
• Insurance is a financial tool specially created to reduce the financial impact of unforeseen events and create financial security.
• Insurance works on the law of large numbers where contributions by many in the form of premium pay for the losses of a few. By paying a premium for protecting against a certain type of loss, you will be protected for a certain sum of money that you will receive if you face that loss.
• For example, if you pay a premium for hospitalisation expenses up to Rs 1 lakh, then the insurance policy will pay you up to Rs 1 lakh when you incur hospitalisation expenses.

You can buy your insurance policy through an individual agent, a corporate agent or a broker.

• An agent or broker must hold an IRDAI licence. Check on that first. Other relevant information you should ask and get include details of the policy, the benefits, what the policy excludes or does not pay for, clarifications regarding documentation and procedures at the point of claim.