Need and Benefits of Buying Life Insurance Plan

1. Need and Benefits of Buying Life Insurance Plan

2. A life insurance plan is not a liability or even a mere investment option. It is a crucial support system and a way to give financial protection and stability to an individual’s family or dependents in the event of his or her accident, illness, death, etc. The concept of life insurance has been there since ancient times. Today, there has been a growing awareness among people about the importance of choosing the best life insurance policy that suits their personal needs.

3. Under a life insurance plan, the insurance company pays a lump sum amount to the beneficiaries of the policy holder. Life insurance policies are promoted as investment or saving schemes and the best life insurance plansalso promise a gamut of benefits for the insured.

4. How one can gain from life insurance plan? Tax Benefits: An insured person can avail additional benefits in terms of tax exemption, up to Rs 1.5 lakh, for the premium paid as part of the policy, under the section 80C of the Income Tax Act 1961. There are certain policies that provide benefits on maturity which are also entitled to offer tax deductions on the maturity earnings, under the section 10 (10D). Investment and returns: The best life insurance policies prove to be effective financial planning tools for individuals and bring long-term benefits. They help in better money management and often considered as a perfect plans to fulfil one’s retirement goals. Besides retirement planning, they also serve investment tools to support other stages of life such as education, marriage of child, building home, etc. With the underlining feature of better returns on investment, life insurance plans ensure security of one’s finances and lower risks.

5. Emotional and Financial support: Insurance companies promote their best life insurance plans with the primary objective of guaranteeing not only financial support for the beneficiaries during loss of income, but also psychological support when a family is going through difficult times. Availing loan against policy: When choosing the best life insurance, an individual should know if the policy provides a provision which lets the policy holder avail loan in case of urgency, to take the amount of loan either in the percentage of the insured sum or as the cash value. The loan can be secured from the insurance company or through any non-banking financial company (NBFC), at competitive rates much better than other modes.

6. How it works to benefit the insured? A life insurance is an insurance policy or basically an agreement between an insurer and the policy holder by which a designated sum of money will be given to the beneficiaries by the insurer. The payment, done in exchange for a premium amount paid regularly or as lump sum, is executed in the event of death of the insured person. Sometimes, cases such as terminal illness or critical illness are also considered. On approaching the insurance company, individuals looking to buy life insurance plans are required to follow certain simple steps involving application submission for availing the policy. By thoroughly reading the terms and conditions, potential policy holders get a clear understanding of the benefits they would be having and also about the generic exclusions, for instance, pre-existing medical condition, suicide, etc.

7. In order to get the maximum advantage from an insurance policy, individuals should compare the various policies in the market and choose the best life insurance plans among the many. They should keep in mind some points such as the scope of policy cover for the set amount or the claim settlement ratio. Companies with the best insurance plans make it a point to ensure speedy and hassle-free claim settlement. Moreover, the flexibility of customising a plan is another factor basis which life insurance plans are compared. Since different individuals have different needs, the option of customization becomes a necessity and not a luxury. The extent and number of deductibles by the company can be regarded as another important factor for comparison. Keeping in view the above points and the host of benefits offered by life insurance plans, people should realise why having a life insurance plan is a must in today’s times, especially when it comes to securing a family’s future.