What are the benefits of life insurance?

What are the benefits of life insurance?

Meaning of life Insurance:- Life insurance is a type of policy. Which involves an agreement between two or more parties as a promisor and a promisee. In which a life insurance company pays a certain amount as per the contract to the insured person in the event of the life attaining a specified age or in the event of death ( Except the accident death).

However, such a policy provides additional benefits in the event of an accident.

In other words:- Life insurance policy contains a document which expresses the contract between the insurer and the insured. The contract of life insurance comes into existence when the insurer accepts the proposal given by the insured and complies with the terms of the acceptance. Benefits of life insurance 

BENEFITS OF LIFE INSURANCE

Life insurance provides some benefits which provide security to the life of the insurer person. It is known as financial security of life. As these are the following benefits of life insurance.

1. Risk Cover
2. Planning for life stage needs
3. Protection against rising health expense
4. Builds the habit of savings
5. Profitable and safe long term investment
6. Assured income through annuities
7. Protection plus savings over a long term
8. Return on investment
9. Facility of loans
10. Tax Benefits

(1). Risk Cover:- Life insurance provides protection against the uncertainty of life in the future circumstances. So any policyholders can enjoy their life with potential without over thinking about the future uncertainty of life. Thus, by taking such a policy, life risk can be covered in case of unfortunate circumstances.

(2). Planning for life stage needs:- During life many needs are rising. Which can be met with the help of financial investment. These needs like children\’s education, marriage of their children, old age support when a person is unable to work in old age. So insurance policy provides benefits as money back, cash value provided by guaranteed, Guaranteed Maturity Values. Thus, life insurance is a tool which provides benefits for life stage needs.

(3). Protection against rising Health Expenses:- Health insurance policy provides the additional benefits of protection against critical diseases and hospitalisation expenses. In such cases lifestyle diseases and medical costs can be met because such expenses are increasing due to inflation. Thus, policyholders may cover critical illness, personal accident, family benefits income. Thus additional benefits are covered under the policy holders. Benefits of life insurance 

(4). Builds the habit of savings:- Life insurance is a long term contract policy. In which policyholder has to pay a fixed premium at a predefined periodically. This process builds the habit of long term savings. Thus, regular savings in the long period is ensured that a decent corpus is constructed to meet financial needs on different life stages of policyholders. Benefits of life insurance 

(5). Profitable and safe long term investment:- IRDA is a regulatory body, through various rules and regulations ensures that the safety of the policyholders money is the primary responsibility of all stakeholders. Thus, life insurance in the long term savings of insurance, because life insurers focus on returns over a long term period. And don\’t take risky investment decisions for short term gains.

(6). Assured Income through annuities:- Life insurance is one of the best instruments for retirement planning. Which money saved during the earning life term is utilised to provide a steady source of income during the retired stage of life. Benefits of life insurance 

(7). Protection plus savings over a long term:- Thus, life insurance policy is considered by the distributor as well as the customers as a long term commitment. So this policy can help the policyholders meet the need of protection and long term wealth creation with efficiently. Thus, any goals determined by the policymakers can be met with such investment. Benefits of life insurance 

(8). Return on investment:- Return on investment of life insurance is better than other investment alternatives. Some schemes of life insurance provide bonuses whereas some other investment alternatives cannot offer such bonuses. Thus investment made in life insurance is less risky and safe as compared to other investments. Because investment in life insurance earns good return on the investment. Because after the completion of terms or demise of the insured, all sum assured under the policy will be returned to the policyholder. Thus, money invested in life insurance is safe for returns and paid back money values as compared to other investments. Benefits of life insurance 

(9). Facility of Loans:- When the policyholder needs a loan during his life. He can use his policy against such loan documents. But such loan can be taken as a certain percentage of such policy value against such loan as per the depending upon the policy provisions. Otherwise, we know that every loan process needs more documents required. But in the case of insurance policies, loans can be taken easily by policyholders. Benefits of life insurance 

(10). Tax Benefits:- Insurance policy provides many tax benefits under most of the plans of insurance policy. As under section 80C of income tax act is an effective way for the salary person to reduce tax liability. Under section 80C, currently the amount available for the rebate is 1,00,000 which can be invested in the life insurance premiums, pension superannuation fund, employees provident fund and mutual fund schemes. Thus, the amount invested in these funds is eligible for rebate through which deduction of the amount from gross taxable income. 

Conclusion:- From the above discussed benefits we can conclude that life insurance policy provides us many benefits. Which benefits contribute in different fields such as financial needs, tax benefits, return on investment, habits of savings and rising expenses against life. Thus, a life insurance policy can be taken by any person. Benefits of life insurance 

Note:- There are following answers concerned with the investment. Which must be considered by the investors before the investment. These are following Benefits of life insurance 

Avenues of Investments

Risk determination of investments

Suggestion:- When you feel tired on the way to study, you can read love stunning poetry as per your desire for the purpose of refreshing your mind from the given category. Benefits of life insurance 

Benefits of life insurance