Life insurance is a contract between an insurance company and an insured. Accordingly, if there is any type of accident with the insured in which he dies, the insurance company pays a certain amount to his nominee (family member) person. The insured has to make regular payments of a small amount as a premium for a limited time. This insurance policy acts as a financial security shield for the family or individuals.
Apart from the financial security of the family, the life insurance policy also helps in saving tax under section 80C and 10 (10D) of the Income Tax Act, 1961. Apart from tax benefits and financial security, a life insurance scheme offers many additional benefits, which we will know further in detail. Let us first get information about some good life insurance plans in India.
Why should you buy a life insurance policy and what are its benefits?
No person can tell what is going to happen in the future. At any time in life, leaving someone can cause problems for his family. Therefore, buying a life insurance policy will ensure that your family will be able to live life easily after you. They can maintain their standard of living in case of any emergency. There are many benefits that provide life insurance policies to policyholders. Let’s have a look at the most important benefits.
Financial Assistance (Death Benefit)
A person needs insurance to cover his expenses, repay debt, maintain the income and education of children. Death is a fact. They all know, but what happens when a person dies. So in his absence, his family has to face a lot of hardships. At such times, life insurance works as an assistant and contributes to meet their needs.
Any person may face an accident in which there may be some disharmony with him. The cost to recover oneself after an accident is huge and the general insurance policy does not get them the support they need. But fortunately, a life insurance policy is able to do this, its goal is to meet the needs that we think to reduce.
In the case of retirement, there are some schemes that prove beneficial in saving money. You save money within a certain period of time, which you later get back as an income. It serves a fixed income at the time of retirement.
People availing of life insurance also have the option to avail a loan or loan through their insurance policy. Which can help them to fulfill their life needs without working out the assured benefits on the policy purchased.
Life insurance offers attractive tax benefits and helps you to make a huge amount of money. Almost all life insurance policies provide you the benefit of a tax deduction on payment of section 80C premium of Income Tax Act, 1961 and also provide tax-free insurance amount under 10 (10) D.