Life Insurance Benefits
Life Insurance Benefits are the features through which the life insurance policy can help the life assured and his/her family members in difficult circumstances. Life insurance benefits are features which make life insurance a must have for everybody.
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Life insurance acts as a shield for the policyholder and the family members of the policyholder if the policyholder is not around. It promises to offer the sum assured to the policyholder’s family in the event of the policyholder's death. Other than death benefits life insurance also offers maturity/survival benefits to the policyholder if he/she survives the whole policy term but life insurance also has other benefits and a potential buyer must understand what benefits come along when you purchase a life insurance plan.
Top Benefits of Life Insurance Plans
How Life Insurance Benefits Policyholders?
Life insurance can provide financial assistance to the family of the life assured in difficult circumstances such as unforeseen demise of the lise assured during the coverage period. Under a life insurance policy a death benefit is provided to the nominee/family of the life assured in case of an untimely demise of the life assured during the coverage period given that the policy is active. In case of a sudden demise of the life assured, the death benefit shall help the family of the life assured to fulfill their immediate financial expenses, daily expenses and pursue their dreams even if the life assured is not around.
Following are the benefits of purchasing life insurance plans:
1. Life Cover: A life insurance policy provides a sum assured as the death benefit in the event of the demise of the policyholder, thereby providing financial security to the insured family. Life insurance thus acts as a shield and ensures that the goals and aspirations of the insured’s family members are not affected even in his/her absence.
2. Peace of Mind: Life Insurance helps creating a sense of peace of mind for an individual because it ensures that the policyholder gets life coverage and also ensures that the policyholder’s loved ones are financially secured at the time of the untimely demise of the policyholder. Life insurance also provides financial aid at the time of medical emergencies that decreases the stress to arrange funds right at the same time.
3. Tax Benefits: Life insurance premiums qualify for tax deduction under Section 80C of the Income Tax Act. Also, as per Section 10D, the sum assured received on maturity of the life insurance plan is tax-free if the premium is up to 10% of the sum assured or the sum assured is at least 10 times the premium amount.
4. Availability of Loans Against Life Insurance Policy: Life insurance plans provide an option to take a loan on the existing insurance policy to overcome any urgent requirements of the policyholder. The policyholder can borrow a certain amount without affecting the benefits that are already being offered in the life insurance. The availability of loans on insurance plans is available for some insurance plans only.
5. Income Benefits: Life insurance plans such as Money-Back Insurance plans provide an option to create regular income in intervals for the insured’s loved ones in the event of the untimely death of the policyholder. This ensures that the insured's family member is financially independent and secured.
6. Critical Illness Cover: Some life insurance plans include critical illness cover. Critical illness can sometimes be inbuilt in the life insurance plan or it can be purchased for additional coverage along with benefits under the life insurance plan. Critical illness cover provides financial support at the time of diagnosis of any critical illness that is listed under the insurance companies. This cover also provides financial aid for expenses made at the hospital for treatment.
Top Benefits of Buying Life Insurance in Early Years of Life
Below mentioned are some major benefits of buying life insurance policy in early years of life:
1. Lower Premiums: Buying life insurance at a young age can be very affordable in the long run. Factors such as age and health condition of a life assured play an important role at the time of premium calculation of a life insurance policy. When a person is in his/her twenties or thirties they tend to be in better health which results in the cost premium of a life insurance policy being quite affordable as compared to the cost premium for older investors. Premiums of life insurance are relatively high for older investors because people in their forties or fifties tend to be more prone to diseases which require additional coverage. Another reason for premiums being low for an investor who is young is that life expectancy is high. It is advised to invest in a life insurance policy at a young age.
2. High Coverage at Affordable Premium: When you choose to purchase a life insurance plan as soon as you start earning a living for yourself and your family, you can avail comprehensive coverage at low premium rates. When you purchase a life insurance policy at a young age the premium for the remains the same during the policy tenure.
3. Early Financial Security: You may not feel the need of purchasing a life insurance policy at a young age, but what you don’t is that by purchasing a life insurance policy you can ensure financial security of your family from the uncertainties of life, such as your unforeseen demise during the coverage period. Initially you may think you don’t need to worry about financial security of your family at a young age but you may leave them financially unprotected in case of your sudden demise. Your family may have to financially struggle a lot and may have to compromise on their dreams in such cases. Life insurance can help you ensure financial security of your family in case of your sudden demise during the coverage period, which can help your family to meet their daily financial expenses and pursue their dreams in your absence.
4. Save Taxes at an Early Age: When you start earning at a young age, you would want to save taxes at a young age also. With life insurance you can save taxes as premiums paid towards a life insurance policy and riders are eligible for tax exemptions under different Sections of Income Tax Act, 1961. If you purchase a life insurance policy at a young age you will be able to save tax at a young age under Section 80D and 10(10D) of the Income Tax Act, 1961.
Life Insurance Benefits That Makes it a Must Have for Everyone
Below mentioned are some benefits of life insurance policies that make it significant for everyone:
1. Death Benefits: A major benefit of purchasing a life insurance policy is to ensure financial protection of your family in case of your sudden demise during the policy tenure. Under a life insurance policy sum assured/death benefit is provided to the nominee/family of the life assured in case of an untimely demise of the life assured during the policy tenure given that the policy is active. This benefit of the life insurance policy helps your financial security of your family.
2. Investment Component: There are several types of life insurance policy available in the market such as, ULIPs, Money-Back, Retirement, Child Life and Endowment plans. These types of life insurance policies have investment components which provide wealth appreciation or invest part of premiums paid into market-linked investment options. This way you create a corpus for yourself while availing the benefit of life insurance.
3. Additional Coverage: Under life insurance policy you get the options to enhance the coverage of your policy by opting for additional coverage. Additional coverage are known as riders which come in exchange of additional premium and you can purchase these riders to your policy at the time of policy issuance. Some common riders that people often choose for their life insurance policy are Accidental Death Benefit, Critical Illness Benefit, Accidental Total and Permanent Disability etc. These riders can give you the flexibility to customise your policy according to your needs and budget.
Benefits of Life Insurance
- ICICI Prudential Life Insurance
- SBI Life Insurance
- Aditya Birla Sun Life Insurance
- Aegon Life Insurance
- Kotak Life Insurance
- Edelweiss Tokio Life Insurance
- Exide Life Insurance
- Bajaj Allianz Life Insurance
- Future Generali India Life Insurance
- Bharti AXA Life Insurance
- Canara HSBC Life Insurance
- Star Union Dai-ichi Life Insurance
- Aviva Life Insurance
- Reliance Nippon Life Insurance
- Ageas Federal Life Insurance
- Sahara India Life Insurance
- IndiaFirst Life Insurance
- Max Life Insurance
- HDFC Life Insurance
- TATA AIA Life Insurance
- PNB MetLife Insurance
- LIC of India
- Pramerica Life Insurance
- Shriram Life Insurance
Disclaimer: InsuranceDekho does not endorse, rate or recommend any particular insurance company or insurance plan.
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FAQ About Life Insurance Benefits
Why should I buy life insurance?
If you are the sole breadwinner of your family, then you must have life insurance to ensure that your family continues to receive financial protection even when you are not there with them. Life insurance ensures the financial safety of your family in your absence. In case of a misfortunate event of your demise, a life insurance policy provides sum assured to your family. Your family can use the sum assured to meet expenses.
What are the benefits of life insurance?
Following are the benefits of having life insurance:
- Financial stability for your family in your absence
- Tax benefits under Section 80C of the Income Tax Act, 1961
- Regular money back payouts with money back/endowment plan
- Option to avail loan against your policy that has a savings component
Is life insurance necessary?
No. Life insurance is not necessary but it is a wise decision to buy it if you are the sole earner in your family and have a dependent spouse and/or children. Apart from offering support to your family, a life insurance policy offers a number of advantages as well as flexibility for investment.
Can I avail tax benefits on the premium paid for life insurance policy?
Yes. You can avail tax benefits on the premium paid for life insurance plans under Section 80C of the Income Tax Act, 1961.
Do I have flexibility for premium payment for life insurance plans?
Yes. You can pay premiums for life insurance plans on a quarterly, monthly, half-yearly, or yearly basis. However, it is better to opt for a monthly payment mode as it becomes easy on the pocket.