Life insurance should be the utmost priority for any individual who is earning in his financial portfolio to secure a safe and secure life for the people who are dependent upon him/ her. According to the needs and financial condition, one can check life insurance plans online and opt for the most suitable one.
To know the benefits of life insurance we have to get to know about some important questions
“What is life insurance?”
Life insurance is a written contract under which the Insurance provider and policyholder comes into agreement. The insurance provider ensures a safeguard of financial responsibilities after the death of the policyholder, in which the policyholder pays a monthly or annual amount to the insurance company for a certain agreed amount according to the policy availed.
Based on the agreement after the maturity or death, insurance has to pay an agreed amount after the maturity or death of the policy to the nominee or family of the policyholder.
“Importance of life insurance ”
A country’s citizens must have a cover of life insurance so that their loved ones don’t have to be in captivity of their financial needs in the absence (death)of the individual, so it is very important for people to take a life insurance policy. To safeguard their family needs if any kind of mishap or demise happens to the policyholder insurer provides full agreed financial assistance to family or dependants. Insurance companies ensure a certain amount to the affected family of the policyholder to meet the monetary amount decided while buying the policy initiatives that can be used for children education, maintenance of parents daily needs, repayment of loans, etc.
Top 5 benefits of life insurance
- Financial freedom in distress
Life is unpredictable,If any mishap or unfortunate death happens to the policy holder then life insurance ensures financial freedom for the dependants. According to the insurance sector experts, an individual should opt for 8 to times the annual salary while buying the life insurance. the compensation amount is given to the nominee or the dependent of the holder and provides an umbrella of protection from the financial loss of the bread earner of the family. So life insurance is extremely important for every family to attain financial freedom in times of total distress.
- Tax benefits
Depending on the state under various sec of the income tax act life insurance holder can get rebates or benefit up to a certain amount per year from taxable income. Therefore with the inclusion of life insurance in your portfolio, you can get tax benefits from the government. This benefit also extends up to the maturity amount of the insurance which also becomes tax-free since the government assumes that the income is saved for emergency purposes in dire need of the family.
- Alternate way of wealth generation
There are various insurance companies present in the market that not only ensure the life of the policy holder but also helps in the creation of wealth. With comprehensive policy companies take extra premium and invest where your money can beat inflation and certainly ensure a hefty amount in the overall generation of wealth.
- Low premium for young age
For any young individual, the life insurance premium is low as the insurance company assumes that the individual will leave long term and also a long term source of income in the form of a long term period of premium. The benefits go hands in hand where the policy holder gets comparatively low premium rates locked for a long period of time instead of fluctuating or high inflation rates.
- Charity fulfillment
Some people want to live for a social cause and make others’ lives better even after their death. In such cases, there are certain life insurance policies to fulfil this requirement of the people. These people opt for life insurance in which they can make the beneficiary to any trustworthy charitable institution. In case of their death, all the insured amount of money will be transferred to that charitable institution as a beneficiary. Therefore in this way the philanthropic needs get fulfilled even after the passing away of policy holders.
Thanks for reading this article, we hope that this would have added a different view and given an overall benefit of life insurance for your precious life.
