Benefits of Life Insurance (How it Costs)

Many of us do not know what life insurance is or the benefits of life insurance. As a result, we remain ignorant about it without knowing it and we do not leave the world without making some provision for future generations. In today’s blog we will try to discuss in detail about life insurance policy and why you should buy life insurance.

Many of us think, why do life insurance? What is the need to take so much trouble? But think about it, maybe your family is solely dependent on you. You yourself can die anytime due to an accident or any fatal disease. What will happen to them in that case?

So one solution to thousands of such potential problems is life insurance. Life insurance allows you to leave a guaranteed savings for your family for any unforeseen event.

What is life insurance?

Before knowing the benefits of life insurance or life insurance, let’s know what it is basically? In very general terms, it is a type of savings where you deposit a certain amount of money every month and the insurance company pays you that promised amount in case of any accident or loss.

Was it a little difficult to understand? Usually when we open a savings account in the bank, we deposit some money for a certain period of time in return for certain dividends every month. After a certain period, we do not withdraw that money with interest. But not so with insurance.

Suppose, you take out a life insurance policy of Rs.5 lakhs. Where you have to pay a premium of 3 thousand rupees per month. But the insurance company will not give you any benefit for this 3 thousand rupees. Rather, if you die due to an unexpected accident or illness, they will hand over that 5 lakh rupees to your family which will be a financial help for your family.

So in simple words life insurance is a contract or guarantee arrangement where you agree with the insurance company to pay compensation to your family after your death in case of any future unfortunate accident by depositing a certain monthly amount.

Benefits of Life Insurance

Life insurance has many benefits as it provides you with special help in case of emergency. As a result, you and your family can be prepared in advance to face any unexpected disaster. Life insurance has several advantages. It is mentioned in sequence below.

1. Post-death benefits

If any unforeseen event happens to the insured, resulting in loss of income to their family, the insurance company compensates them in the form of death benefit. Appointed candidates get the promised full amount and bonus accrued over a specified period of time.

Apart from providing death protection, many life insurance plans also offer monthly income benefits. Such insurance is an excellent benefit for individuals who have reached retirement age and whose income is declining.

But while getting life insurance be careful to evaluate the features and benefits of several plans and select the best one for your needs to provide the best protection.

2. Return on investment

Renowned financial advisors suggest that everyone should invest in a life insurance policy. Not only to provide financial security to the family when you are not there, but also to get excellent return on investment.

Additionally, life insurance is a safer financial instrument when compared to other investment options. The money you have invested in the insurance will be fully paid back to you as guaranteed money at the end of the term or after the death of the insured.

3. tax benefits

A significant life insurance benefit is the tax benefit. If you are a salaried employee and purchase a life insurance policy, you may be eligible for a discount.

4. Loan facility

When you need money in an emergency, you can take a loan against life insurance coverage. Almost all major insurance companies now offer loan facilities against insurance to policyholders.

Depending on the terms of the policy, you can borrow a certain proportion of the cash value of the insurance or the sum assured. So before you contract for insurance, know the loan policy with the insurer well.

5. Correct financial planning decisions

It’s important to plan your financial decisions carefully as you move through life’s stages. Life insurance can help you in just this case. You can use various term life insurance benefits to provide financial support to the family in case of your untimely death.

This will not only help them fulfill their financial responsibilities, but it will facilitate them to live a financially independent life without disrupting their lifestyle. It will help immensely in various important occasions like marriage of sons and daughters, paying for the schooling of the 5th child and building a dream house for the post-retirement life.

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