Since life is full of uncertainties, financial security is important for a stress-free and peaceful life. And, life insurance is a great way to protect your loved ones from unexpected circumstances. Besides, it also serves as a long-term investment option with guaranteed returns.
A suitable option for financial protection, life insurance offers several benefits that you must know before purchasing a policy. While life insurance benefits vary by policy you choose, let’s explore its top 10 benefits.
Understanding Life Insurance
Life insurance is a legal agreement between the insurance company and the policyholder in which the insurer agrees to pay a lump sum amount to the nominee in the case of the death of the insured individual. And, in return, the policyholder makes premium payments to the insurance company for a certain period.
This insurance contract is effective for the period mentioned in the policy document agreed by the insurance company and the insured individual.
Benefits of Life Insurance
There are several benefits of purchasing a life insurance policy. So, let’s explore the top 10 benefits of life insurance.
1. Financial Protection
Among various benefits of life insurance, financial protection is highly significant. With a life insurance policy, you can ensure that your family will not need to compromise owing to financial problems in case of any misfortune. Besides, it will also support them in managing financial responsibilities, such as loan repayments.
2. Death Benefits
The death benefits of life insurance include the payment of guaranteed or assured amount to the beneficiaries in case of the demise of the policyholder. During such a situation, not only this financial support can help reduce the burden substantially, but also aid in repaying loans/debts, paying education costs or managing household expenses monthly.
3. Maturity Benefits
The maturity benefit in life insurance is usually a lump-sum amount along with bonuses that is paid to the insured person by the insurance provider when the policy matures. However, it depends on the policy type, terms and conditions.
4. Flexible Premium
Life insurance allows policyholders a flexible payment option that can be customised as per their requirements. For instance, if you are investing in a life insurance policy, then you may decide to pay the premiums either in one single payment or several periodic payments.
5. Long-term Savings
Life insurance is one of the most crucial tools for long-term savings and financial protection. It supports your family from the financial burden after your unfortunate death or disability. Life insurance acts as a safety net that helps you reach your long-term financial goals.
Some life insurance policies, such as endowment and money-back plans, offer long-term savings and investment opportunities, providing guaranteed sum assured along with bonuses. Besides, they can also be used as a retirement planning tool.
6. Loan Option
Based on the terms and conditions of the policy, some of the life insurance policies offer a loan option against the policy and allow borrowing of a certain percentage of the sum insured.
7. Retirement Planning Option
Life insurance companies provide retirement options for their customers, including Annuity Plans and Retirement Plans. These plans offer both the coverage and the investment option.
For the retirement plans, you must make the periodic payments, i.e., monthly, quarterly, half-yearly or yearly, to the insurance provider up to a specific period. And, the insurer will pay a certain amount to the insured person post retirement. This amount depends on the type of plan chosen by the policyholder.
8. Tax Benefits
Under Section 80C of the Income Tax Act, 1961 in India, policyholders may get a tax credit of a maximum of Rs. 1.5 lakh for the payments made against their insurance premiums. Additionally, the premium payment made for riders with critical sickness can be claimed under Section 80D, and the reimbursement received from an insurance company is tax-free, according to Section 10(10D) of the Internal Revenue Code.
9. Riders
Riders are additional benefits that you can choose for your existing base plan at affordable rates, such as critical illness, waiver of premium and accidental death. They allow you to modify the coverage as per your individual requirements.
10. Peace of Mind
Death is uncertain, and your family may face financial burdens in your absence. Hence, securing the financial future of your family with a life insurance plan is essential.
Life insurance offers peace of mind to the insured individual, ensuring that his/her loved ones will be financially protected in case of his/her unfortunate demise. With this peace of mind, you can focus on your personal and professional goals without being concerned about your family’s future.
Types of Life Insurance
Different types of life insurance plans are available in India, which include:
● Term Insurance Plan
● Whole Insurance Plan
● Endowment Plan
● Unit-Linked Insurance Plans (ULIPs)
● Money-back Plan
● Retirement Plan
● Child Plan
Eligibility Criteria for Life Insurance
Eligibility criteria for life insurance varies by insurance provider and the policy type. Generally, individuals (male or female) who are between the age of 18 years and 65 years can invest in life insurance. However, eligibility criteria also depend on different factors, such as health, income, lifestyle, occupation and financial stability.
In conclusion, life insurance is a valuable tool that is designed to provide financial security to your loved ones in case of your unfortunate death. Therefore, when you buy life insurance online or offline, considering its several benefits is essential.
Disclaimer:
CBD:
Qrius does not provide medical advice.
The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) outlaws the recreational use of cannabis products in India. CBD oil, manufactured under a license issued by the Drugs and Cosmetics Act, 1940, can be legally used in India for medicinal purposes only with a prescription, subject to specific conditions. Kindly refer to the legalities here.
The information on this website is for informational purposes only and is not a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or another qualified health provider with any questions regarding a medical condition or treatment. Never disregard professional medical advice or delay seeking it because of something you have read on this website.
Gambling:
As per the Public Gambling Act of 1867, all Indian states, except Goa, Daman, and Sikkim, prohibit gambling. Land-based casinos are legalized in Goa and Daman under the Goa, Daman and Diu Public Gambling Act 1976. In Sikkim, land-based casinos, online gambling, and e-gaming (games of chance) are legalized under the Sikkim Online Gaming (Regulation) Rules 2009. Only some Indian states have legalized online/regular lotteries, subject to state laws. Refer to the legalities here. Horse racing and betting on horse racing, including online betting, is permitted only in licensed premises in select states. Refer to the 1996 Supreme Court judgment for more information.
This article does not endorse or express the views of Qrius and/or its staff.
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