Life Insurance

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What is life insurance ?

Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder).

Benefits of Life Insurance

Most people buy Life Insurance primarily to ensure peace of mind and secure their families standard of living in case of any unfortunate event. Life Insurance ensures that your loved ones will meet their Life Goals, come what may!

A life insurance policy can prove advantageous in a number of ways besides just the risk cover. When you opt for a life insurance plan, you could stand to receive the following benefits.

1. Tax Benefits:

Life insurance policy offers you tax saving benefits under section 80C of the Income Tax Act, 1961. Under this Act, the premiums paid towards a life insurance policy are allowed as tax deductions from your taxable income up to the tune of INR 1.5 lacs every year. The payout of a life insurance policy, if any, may also be exempt from taxation.

2. They help with loans:

With a life insurance policy you stand to receive two loan-related benefits. The first is that if you meet with an untimely demise, your life insurance plan will safeguard your loved ones from any mortgages you may have, such as home loans, etc.

In case of a financial crunch, instead of surrendering your policy mid-way through your goal realization, you can easily avail loans by putting your life insurance policy up as a collateral. You can take a loan against the surrender value of your life insurance policy. This is applicable for certain types of Life Insurance products.

3. Investments:

Some life insurance plans also provide as a useful investment and compulsory savings instrument. They allow for long term capital accumulation and appreciation whilst also protecting your family members from the ups and downs in life with tax benefits.

4. Financial Planning:

A life insurance policy can also serve as an effective tool that aids in your financial planning at every stage of your life goal. For example, with a child life insurance plan, you can plan for your children's upbringing, their education and even their marriages, right from the day they're born.