Life insurance is a contract between an insurance policyholder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium after a set period or upon the death of an insured person. Life insurance offers you and your family financial protection. Some policies also offer optional add-ons, such as critical illness benefit, accidental death benefit, and more. The importance of life insurance cannot be ignored in ensuring the financial safety of your loved ones.
Benefits of Buying Life Insurance
Life insurance provides your family with much needed financial protection, in your absence. It gives you peace of mind and confidence and helps you save taxes. There are several benefits of life insurance. Let us take a look at some of them:
- Financial security: Life insurance products can provide you and your loved ones with financial security. You can financially secure your family by choosing a substantial life cover+ so that they can maintain their standard of living in your absence
- Wealth creation: These life insurance plans help you create wealth over time and build savings. Life insurance plans can be used to save for your future needs. They offer options to cover different types of risks and goals
- Disciplined investment: With regular premium payments, life insurance plans inculcate financial discipline. They offer unique investment opportunities for every risk type with a wide range of products, such as unit linked life insurance plans, guaranteed savings insurance plans, endowment plans, and more
- Retirement planning: Life insurance products like annuity plans, savings plans, endowment plans, and others help you build a retirement pool. These plans offer guaranteed income on maturity and help you secure your retirement with adequate savings
- Tax savings: Life insurance plans offer many tax` benefits to facilitate better savings. The premiums paid are tax` deductible under Section 80C and 80D of the Income Tax Act, 1961. The maturity benefits also enjoy a tax-free` status under Section 10(10D) in most cases
At first glance, this might seem like a redundant question.
To many people, the direct answer is NO.
But if we look closer, there will be different things that may change your opinion.
There are many benefits from life insurance in general, but let’s be specific to the 20s of your life.So why do we need life insurance while you’re at the very early stage of life without many risks of health issues, and there are way more things to focus on, plans to do, and a whole wide world to change?
