Life Insurance is the only investment module that ensures financial security for your future along with long term capital gains. Most importantly it also acts as an excellent tax-saving instrument, and also helps you earn rich dividends which again are tax exempted. It is a must for every average investor to have Life Insurance included in their investment portfolio so that they aren’t deprived of a permanent source of income when they actually have no source of income. Investing in Life Insurance should be made wisely. Proper time, budget the right kind of policy should be evaluated prior to making the investment.

When you decide to invest in Life Insurance Policies there are certain factors that you need to analyze prior to making the investment. The first is the policy you will invest in. When you visit Life Insurance Companies that offer you with a list of policies leaving you confused as to which one you should invest on. It is advised that you opt for the assistance of a Life Insurance Adviser to help you sort out a policy based on your needs, income and financial goals. Budget is also important. Depending on your income you choose an amount that you find affordable to pay as Life Insurance Premium. This payment is calculated on a yearly basis and is payable on a half-yearly to quarterly basis. All Life Insurance Companies demand that you pay your premiums on time. Failure to do so in the stipulated period will have the company confiscate you policy.

The Life Insurance Premium depends on the kind of policy that you choose to go in with. When you choose your policy you consider all essential factors that cover you and your family: i.e. people who are financially dependent on you, so that in your absence they are financially secured. Such policies are referred to as Family Life Insurance. Life Insurance coverage is also to be taken care off. If you find the need to be covered through your entire life it is suggested that you opt for whole life insurance policies. In this case you will need to keep paying premiums through out your life. Once you decide to stop paying the premium and the policy the entire amount will be handed over to you. In case of death the amount is handed over to the nominees. The other type of policy that one invests on is a term policy, where you pay the premium is paid for a certain term which is known as the Life Insurance Term. On the completion of the tenure the amount with the dividend (depending on market conditions) is handed over to the beneficiaries or the insured.

Another Major advantage of Life Insurance is that it acts as an excellent tax-saving instrument. Under 80c of the Indian Income Tax act any individual having an annual income of over Rs 1.5 lacs INR is liable to pay a certain percentage of his income as taxes. Having that amount invested in Life Insurance spares him from paying the tax. Not only that the dividend or interest that ends up at the end of the tenure of your policy is also tax saving. The Insurance sector has always been in demand since the financial regulation and economical boom that India experienced in the last decade. All major companies are coming out with plans to suit the need of individuals of all kinds right from the masses to the classes. The most prominent Life Insurance Companies in India as of now are 1)LIC, 2)ICICI Life Insurance, 3)Bharti-Axa Life Insurance, 4)SBI Life Insurance & 5) Aegon Religare Life Insurance.