Life Insurance : 10 Benefits of Life Insurance Policy

What are the benefits of life insurance policy

The benefits of life insurance are mentioned here in this article. Life is full of uncertainties and most of them come unannounced. Some of these events have a huge impact to your loved ones. To lessen the financial burden on your loved ones in your absence, various life insurance companies have emerged in past few years. They tend to provide specific plans to their customer known as life insurance policy.

Life insurance policy is an agreement between any insurance company and you that assures you of compensation for loss of life in return for some specified value as decided before taking life insurance policy. In simple words, we can say that life insurance policy will give a certain amount of money to a specified person when there is demise of him.

In life insurance, the beneficiary whose name is given in the contract will receive the specified sum from the insurance company in case of happening of certain events for example loss of life.

What are the benefits of life insurance policy ?

So here are 10 benefits of life insurance policy:-

1. Efficient investment plan

A life insurance policy is not just a simple plan that offers monetary replacements for the loss of income due to death of some family member but offers significant returns on the amount paid during the tenure of policy. Some insurance policy offers considerable returns at the time of completion or maturity, thus help you in meeting your dual needs i.e. a great investment plan and securing the future of your loved ones.

2. Lucrative offers

Many of these life insurance policies come with various amazing offers. With small amount of premium, company guarantees significant outcomes and payouts. Some plan can gives assurances of paying up to 10 times of the small premium amount. So it is better than any other investment plans.

3. Tax benefits

Life insurance policy can be used as an important tax planning tool, as the customer is permitted to avail benefits under the Income tax Act of 1961. These small premiums for life insurance policy qualify for tax benefits under sections of Income tax Act.

The tax benefits are subject to changes of tax laws. The amount invested in these policies is eligible for rebate by deduction of the amount of gross taxable income.

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4. Death benefits

Life insurance policy provides you with high life risk cover that will keep your family happy and protected in case of some unfortunate event.

It tends to provide you a secure future. The person availing this life insurance policy has assurance that if something happens to him, the insurer will pay the whole amount with bonus to the bereaved family. It also safeguards the interest of people of diminishing income with increasing age, people who met accident or for retired people. There are many policies available for us and we can choose that will best suit your requirements.

5. Investment returns

These life insurance policies yield better returns as compared to any other investment plans. Most of these insurance policies provide bonus on the premium amount paid whereas no other investment plans provide such offer so it is great to invest in these policies.

The money invested will fetch you with good return and will be returned fully on completion of the plan or demise of the insured person.

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6. Planning future

This plays an important role in shaping your future life and life of your loved ones. It ids you with life stage planning where we can plan our life financial goals according to our capabilities and income. It also helps you to plan your life stage needs.

Life insurance policy provide you financial support in event of demise with addition to long term investment plan. We can meet various life goals through this investment.

7. Guaranteed income benefits

On the demise of insured person, his family will remain secured due to assured income they will receive from the insurer at regular interval. This income can aid various expenses like house rent, school fees, marriage etc. This income compensates for the income that discontinued after the unfortunate event.

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8. Riders

These are additional benefits which are bought and added to basic insurance policy. These options allow you to increase your coverage or the premium amount or the return after investment. Rider covers the risks that are beyond the main insurance policy, resulting in more attractive offers. These rider may include critical illness, personal illness etc. which are not included in basic insurance policy. Riders also provide tax benefits.

9. Wealth creation

Some insurance policy gives you opportunities to gain wealth. Apart from providing life cover, these policies invest your premium amount in different investment policies to give you risk adjusted returns that beats inflation. When the amount is returned to you, it is increased to a substantial amount as compared to initial amount.

10. Employment

These life insurance policies provide employment to large amount of youths in our country. It also teaches many youths about marketing and investing techniques. This will help country to grow and many young investors will be created by these policies. From the above points, we can conclude that life insurance policies is not a option but a necessity to all of us. It helps in risk minimization and act as protection tool that should be taken without any thoughts. There are many life insurance policy present outside which can be bought according to your requirements. So, these were some benefits of life insurance policy. I hope you liked our article.

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