Life insurance is a contract between an individual (the policyholder) and an insurance company, under which the company agrees to pay a sum of money (the death benefit) to designated beneficiaries upon the death of the insured. Life insurance can be used as part of overall financial planning and wealth management strategies to help protect dependents from financial loss and meet long-term goals such as retirement planning or college costs.
Life insurance policies typically include premiums paid by the policyholder, benefits provided if there is a claim, and surrender value which is what can be received if a person decides to cancel their coverage before they die. It’s important that individuals speak with a financial specialist when deciding if life insurance is appropriate for their unique situation.
Top Two Benefits of Life Insurance
Life insurance is an important component of sound financial planning for individuals and families. Financial security created by life insurance provides peace of mind, knowing that the policyholder’s family will be taken care of financially if something were to happen to them.
The life insurance plan can offer a lump sum or an ongoing payout over time to cover essential costs such as surviving partner/spouse’s living expenses, child care costs, debt repayment, and any education/medical needs. Moreover, in addition to reducing stress and providing financial security, using life insurance as an investment tool can help maximize savings accumulation over time through various strategies. Having this extra layer of protection gives you the ability to enjoy your retirement years without any worries about loss of income while knowing your loved ones are secure.
There are various term plans that are available. You can choose the best term plan as per your needs.
The tax benefits of life insurance under Section 80C of the Income Tax Act in India can provide significant financial relief. This section allows the taxpayer to claim a deduction on the sum of premiums paid towards life insurance policies, up to a maximum of INR 1.5 Lakh in a given financial year. This benefit can be claimed for premium payments made towards any kind of life insurance policy, including both traditional and unit-linked policies, provided that such payments have been made before the due date for filing returns for that year.
Investing in life insurance is an important step to secure your family’s future. An adequate policy will provide financial resources if the worst happens, minimizing the strain of dealing with funeral expenses and other costs associated with death. In addition, life insurance can be used as an asset to help pass funds on to descendants.