What Are The Advantages Of Purchasing A Life Insurance Plan?

Updated On Aug 14, 2021

Life insurance provides a death benefit to the beneficiary in case of an unforeseen demise of the life assured any time during the policy tenure. In case the life assured survives the entire duration of the policy term, a maturity benefit is provided at the end of the policy term. There are different types of life insurance plans available in India, such as Term Life, ULIPs, Endowment, Money-back, Child Life and Retirement plans. One can choose from the range of the different types of life insurance plans according to their insurance requirements and budget.

What Are The Advantages Of Purchasing A Life Insurance Plan?

Following are the advantages of purchasing a life insurance plan:

Financial Security: Life insurance helps you ensure the financial security of your loved ones in your absence. In case of unfortunate events such as your untimely demise during the policy tenure. On your sudden demise, a death benefit shall be provided to your family which allows your family to fulfil their daily financial obligations and achieve their goals. The death benefit can help your family to fulfill their immediate financial requirements and arrange for the future.

Wealth Creation: Some life insurance plans let you avail the benefit of wealth creation. Life insurance plans like ULIPs help you invest your money using different market linked investment tools. Some participating life insurance companies allow wealth appreciation such as endowment plans, under these types of life insurance plan yearly bonuses are declared upon the policy as per the performance of the insurance provider.

Additional Coverage: Under life insurance plans you can get additional coverage by adding life insurance riders to your policy at an additional premium. These riders provide coverage from uncertainties of life such as accidental death, dismemberment, disability, diagnosis/treatment of a critical illness etc. Some common life insurance riders are Accidental Death, Accidental Disability/Dismemberment, Critical/Terminal Illness, Waiver of Premium, Income Benefit Rider, HospiCash Rider, Accelerated Terminal Illness etc.

Tax Benefits: The amount invested in a life insurance policy is eligible for tax exemptions under the Section 80C and 10(10D) of the Income Tax Act, 1961. This was a salaried person is able to reduce his/her tax liabilities.

To Conclude

Life insurance is undeniably a necessity in one’s life especially when he/she is the primary breadwinner of the family. It is a protection tool for you and your family, which can be purchased without thinking twice about. Life insurance lets you have your peace of mind by providing financial security to your family in difficult circumstances.

Also read: How to Link My Aadhaar Card with Life Insurance Policy? What Are Its Benefits?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.