Life insurance is basically an agreement between a life insurance company and a policy holder where the insurance company agrees to pay compensation as a death benefit to the nominated beneficiaries upon the death of the insured during the term of the life insurance policy. The death benefit promised by the life insurance company is offered on the exchange of premium paid by the policy holder.
Life Insurance Policy is the safest and the most secure way to safeguard your family or dependents against various financial contingencies that may occur due to an unfortunate event of your ill-timed demise. Under a Life Insurance Plan in India, the insurance company guarantees to pay a specific sum to the policyholder's family on his/her demise. Also, a life insurance policy can compensate against some other contingencies like a terminal illness or a critical illness if added under the contract. Some other things like funeral expenses can also be received as a part of life insurance benefits if defined in the contract. Apart from the death benefits, a Life Insurance policy in India also offers maturity benefits. These benefits are generally offered in the form of payment if the insured stays alive through the entire term of the life insurance plan. Furthermore, life insurance plans also provide with a number of tax benefits under Section 80C of the Income Tax Act, 1961.
The life insurance company in India generally establishes the specific premium payment that has to be made by the policyholder to the company. However, the applicant is given the alternative to decide the term of the life insurance policy and the sum assured. The life insurance company takes numerous factors into consideration to determine the premium amount for every individual purchasing this policy. The sum assured is among these factors. Higher the sum assured of a life insurance policy, higher the amount of the premium you are likely to pay.
You must consider buying a suitable life insurance plan to ensure that your family doesn't have to make any compromises due to financial crunches.
• Unpredictability: We can't predict life. We can't really sit here and predict our last day on earth. Anything unfortunate can happy anytime without any warning. If you could really control your life then you wouldn't leave anything to ensure the financial security of your family. It's unfortunate that it's not in your hands.
Therefore, the solution is that you must make sure that you buy a life insurance plan. This way you can be a step ahead so. By purchasing life insurance policy you can accomplish the financial goals that you set for your family even when you will no longer be around them.
• Debt-Proof Future: The unexpected demise of a wage earner is nothing less of a tragedy. You have to deal with the emotional crisis initially and it can transform into a financial emergency in no time. With the help of a life insurance policy, any outstanding debt, like a personal loan, motor loan, a home loan, etc. would be taken care of.
• The Fulfillment of Retirement Goals: Life insurance plan is an ideal alternative to achieve the long-term goals. It can also help you accomplish the retirement goals too. Some life insurance plans offer miscellaneous investment opportunities while some life insurance plans provide you with performance-based bonus.
• Avail Tax Benefits: A life insurance policyholder can enjoy tax-benefits regardless of the type of life insurance policy one chooses to purchase. As per the Income Tax Act of section 80 C, the premium payable for a life insurance plan is entitled for tax benefits of up to Rs. 1 lakh 50 thousand.
• Mental Peace: The most precious gift that life insurance policy offers is the ultimate peace of mind by providing financial assurance for the future of your family. Even a basic life insurance plan can help generate funds to take care of the future economic needs of your family.
• Savings Tool: You will have to pay an enhanced life insurance premium if you opt for a traditional/unit-linked plan. This additional amount of money is invested in your preferred fund and as a result, it can act as a savings instrument for the future.
• Children's Future Expenses: A life insurance plan can take care of all the future expenses of your children. Various expenses like wedding and education expenses can be take care of by like insurance policies. In the modern age, the cost of reading a child is through the ceiling. Apart from that, getting an admission in a reputed college costs a high amount of money. Life insurance policy makes sure that the policyholder's your children don't have to make any concession as long as their educational and personal requirements are concerned.
• Business Security: Some life insurance plans certainly cater to the requirements of yours as well as your family's. However, there is availability of some life insurance plans in the market that provide support to your business as well. Life insurance policy also facilitates a business partner to buy the share of his/her departed business partner.
