All About Life Insurance
Updated On Apr 26, 2021
Table of Contents
We all know that life is unpredictable and if you are the chief earning member of your family, your life values very much. One of the best ways to counter the uncertainties of life is a life insurance plan. A Life Insurance is a product designed to protect your beneficiaries financially, in case of your untimely demise. Life insurance works on the principle of 'passing the hat' by cooperative risk sharing.
Life Insurance provides you with a financial cover for your life in return of monthly installments called premiums. It enables your dependents to pay off debts, essential life stage expenses after your death.
Also Read:- How to Download LIC Policy Receipt Online?
What All is Covered A Life Insurance Plan?
Following are the coverages offered by a life insurance plan -
1. Life Cover
In case of your untimely demise, your loved ones may not be able to pay off the debts or mortgages taken over by you during your lifetime. Life Insurance gives you a choice to give off this burden by providing your dependents with satisfactory financial support such as death benefit as a lump sum payout.
2. Maturity Benefit
Some Life Insurance plans can also play a role of a saving instrument by providing you maturity benefit in the form of payout as a return of the premium paid by you.
3. Investment Option
Life Insurance Plans like ULIPs provide you an option to increase your wealth from your savings as they fix a part of your premium to specific funds which yield a good future return and a part as a life cover.
4. Riders
Riders are add-ons provided as an option for modification of your life insurance plan. They provide an additional benefit by either waving of your premiums , accidental death cover ,critical illness cover etc.at low premium increments.
5. Tax Benefits
Under Section 80C of Income Tax Act your premiums are exempted from taxation. The maturity and death benefit provided to you are also exempted from tax deductions under section 10(10D) of Income Tax Act. These tax benefits can add significantly to your savings.
What All is Not Covered A Life Insurance Plan?
As we have seen that life insurance provides you an essential death cover but that only happens if the death occurs due to the insured reasons. There are specific exclusions in which the beneficiary is not provided the death benefit even after your death due to the following reasons:
- Due to participation in any hazardous activity.
- Due to consumption of alcohol, drugs or any other intoxicated stuff.
- Due to suicide whether the life insured is sane or insane.
- Due to participation in an act of war.
- Due to any pre-existing disease.
- Due to pregnancy or child-birth.
Conclusion
Life can not be revived but the financial damages caused by the loss of it can be covered through a Life Insurance. Hence, Life Insurance serves a back-up plan which takes off a major part of the burden of financial liabilities from your loved ones' lives in your absence. The plan even provides a maturity benefit if the life assured survives the policy term. If you need a cover for you and your loved ones, life insurance can play a part of covering the risks over your life journey and even after that. You must think clearly and wisely while choosing a life insurance plan according to your needs and future requirements, so that your savings which you pay to the company in the form of premiums yield you the best coverage for your loved ones.
Must Check:- Why Is It Important To Have Life Insurance?
