There are many reasons why people buy life insurance plans. In fact, the benefits of life insurance are such that a vast majority of the people across the world have life insurance covers. What are these benefits? Take a look at this article to know all about them.
- Different Types of Life Cover - There are many different types of life insurance plans. Since life insurance is a person-specific requirement, you need to choose the type of coverage that suits you and your family the best. Thankfully, when it comes to life insurance, there are many options to choose from. You can buy affordable term insurance plans. You can buy the ever-helpful child plans or you can think about the future and invest in an annuity plan. This wonderful advantage of being able to choose from a wide range of options makes life insurance all the more beneficial.
- Insurance and Investment - Life insurance is a unique platform that allows you to combine the elements of insurance and investment. Most forms of life insurance, barring a few, offer this. When you pay the life insurance premium, a part of it gets fixed in a life fund. If you die, this amount is used to pay the death benefit to your nominees. The other part of the premium is invested in the money markets and continues to fetch dividends. This is how you can earn yields from your life insurance plan. This can help you to save and build up a corpus for your future as well while keeping your life covered all along.
- Safeguarding the Financial Wellness of Family - The biggest reason for buying a life insurance plan is that you get to protect the financial needs of your family. If you are the only, or the primary, the breadwinner of the family, your loved ones depend heavily on your salary for their needs and requirements. You pay the bills, you pay for their education, healthcare, etc. So what happens if you die suddenly and your salary stops? This is a scary thought, but a very plausible one nonetheless. To ensure everything continues smoothly even after your demise, you need to get life insurance. If you die, your family will receive the death benefit and they can take care of their financial requirements even in your absence.
- Peace of Mind - knowing that your loved ones are financially cushioned at all times offers a tremendous amount of mental peace. Your biggest fear is to see your family suffer and to ensure that doesn't happen even after your death, you can buy a good life insurance cover.
- Tax Benefits - There are many tax benefits you get when you buy life insurance and this is another of the unique benefits on offer. To begin with, you get an income tax rebate of up to INR 1.5 lakh for the annual life insurance premium you pay. This provision is available under Section 80C of the Indian Income Tax Act. Then, you also get a tax rebate for any health insurance component you may have in your plan, such as a critical illness rider. This provision is available under Section 80D. And finally, your family gets a tax-free death benefit after you die. The proceeds from the life insurance cover received by the nominees after the death of the policyholder are completely tax-free under the tax laws of India.
- Retirement Planning - You can plan for your retirement with the help of life insurance. Yes, that is correct! You can buy a retirement life insurance plan, also known as an annuity plan, and start saving for your future. You can invest in a deferred annuity plan and save in small amounts from an early age. While you keep saving, you also receive a life cover. This is a wonderful life insurance product that is loaded with benefits. You can also buy an immediate annuity plan around the time of your retirement and enjoy the benefits right away.
- Asset Protection - Certain forms of life insurance, such as term insurance plans, help you to protect your assets. You can buy a term plan for an amount equal to that of a large mortgage or loan. If you die without repaying the loan, your family can use the death benefit received from the plan and clear the dues, thereby ensuring the lender never repossesses your valuable assets. This is an easy and inexpensive way in which you can protect your assets and it is another wonderful and unique benefit of life insurance.
- Very Accessible - and last but not least, life insurance is very accessible and easy to get. These days, you can simply log in and get a life cover instantly. Life insurance companies sell their products online. You can also compare the plans, find the best option at the best rate and get the policy then and there. It is also easy to pay premiums online and modify your plan as and when needed. This ease-of-access is one of the biggest advantages you get with the modern-day life insurance plans. A suitable life cover is literally just a click away!
These are the advantages of life insurance that benefit people from all walks of life. If you haven’t invested in a life insurance plan yet, do so without any further delay. You will be able to build up a corpus which your family can use in your absence, you will get tax benefits and you will also be able to amass wealth.