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Life insurance is a contract signed between an individual and a life insurance company. The individual pays a certain premium at fixed intervals. In contrast, the insurance company pays the beneficiaries the insured amount on the occurrence of the insured event like death/disability or defined benefit of the product on maturity.
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What is Life Insurance ? • Are you unsure of what is life insurance ? A life insurance policy is simply a contract between a person and an insurance company, under which the firm agrees to pay a predetermined sum of money to the person's beneficiaries or family in exchange for a series of payments over time. These payments, which go by the name "premium," are often made annually. The policy holder is the one who purchases the insurance. • Life insurance guarantees a lump sum payment to the family in the event of an untimely death of the policyholder. Money cannot replace the loss, but it guarantees that the family won't face any financial difficulties even after the death of the breadwinner. The life insurance policy offers the essential protection.
Advantages Of Life Insurance Life insurance has meaning especially for those with minor children, children with special needs, those who wish to secure the financial future of their family or wish to build savings over the long term. Here are someadvantages of life advantages: • Return on Investment: The benefits of investing in life insurance. When you go to a financial advisor for financial planning, you will notice that the majority of them will advise you to get life insurance. They encourage you to purchase life insurance so that you and your loved ones are not only protected, but also that you can profit from the policy. • Death Benefit: In the event of an unexpected event that causes you to lose income, the insurance company compensates your family in the form of a death benefit. Depending on the type of policy, the insured’s nominee receives the death benefit as well as any accrued bonus. The death benefit can be claimed as a lump sum or as a monthly benefit, with the monthly benefit option being advantageous for families with elderly or disabled members. • Income tax exemption: The premiums paid under the life insurance policy are tax deductible under section 80C. At the moment, you can claim a maximum tax deduction of Rs.1.5 lakh under this section of income tax. • Retirement Income: Life insurance policies can be purchased to provide regular income after retirement. These are known as annuity policies, and they are available from any life insurance company. If you purchase an annuity policy and pay a premium until your retirement age, the insurance company will pay you a monthly income after you retire.
