Life Insurance- Importance, Benefits And Types

Benefits Of Insurance

Life Insurance Ensures Financial Security Of Your Family In Case Of Any Unforeseen Situation. This Is A Tax Free Income Which Has Many Benefits.

Benefits Of Insurance
Benefits Of Insurance

Life Insurance Is A Financial Security Cover For Life Situations Like Volatility, Disability, Retirement Etc. Depending On The Insurance Chosen, We Pay The Premium Monthly/yearly To The Insurance Company And In Case Of Any Unforeseen Event, The Company Pays The Pre-assured Amount To Us Or The Nominee Chosen By Us.

Importance Of Life Insurance For You And Your Family:

The Primary Purpose Of Life Insurance Is To Help Meet The Financial Needs Of Your Family In Your Absence. In Case Of Any Accident, Your Spouse, Children, Old Parents Will Be Able To Bear The Expenses Of Home And Other Living Expenses From The Amount Received From Your Life Insurance.

Life Insurance Provides You Assured Amount Even In Case Of Your Disability So That You And Your Family Do Not Have To Face Financial Troubles Due To Lack Of Income.

Benefits of Life Insurance:

1) For Managing Your Loans:

At Any Point Of Time, You Would Not Want Your Family To Face Financial Difficulties. Therefore, Any Personal Loan You May Have, Be It Home Loan, Car Loan, Personal Loan, Credit Card Loan, Etc., With The Amount Received From The Insurance Company, Your Family Can Meet All These Liabilities And Live A Life Fulfilling Their Needs.

2) To Meet Long Term Goals:

A Life Insurance Policy Is A Long Term Investment That Can Help You Meet Your Long Term Goals. With The Money From Some Schemes, You Can Buy A House Or Plan For Your Retirement Or Plan For Your Children’s Education. According To Your Goals And Needs, You Have To Choose The Type Of Insurance And Decide Its Premium.

3) For Management of Business:

Some Insurance Policies Not Only Take Care Of Your Family But Also Your Business. If Your Business Is In Partnership, Then In The Event Of Your Death Your Partner Enters Into A ‘Buy And Sell’ Contract. This Allows Him To Buy Your Share In The Business And The Sale Proceeds Are Given To The Nominee Of The Policyholder. However, No Shares Of The Company Are Given To The Nominee.

4) To Supplement Your Retirement Goals:

Who Among Us Would Not Want Our Retirement Savings Not To End Till The Last Day Of Our Life? By Choosing The Right Life Insurance Product, You Can Invest Some Money In It Every Month, Which Will Continue To Give You A Fixed Income Every Month After Your Retirement.

5) For Tax Saving Benefits:

Every Insurance Policy Has A Provision For Tax Savings. The Premium Paid In Any Insurance Policy Will Be Eligible For Tax Exemption Under Section 80C, Up To A Maximum Of 1.5 lakh in a year. In Case Of Death/disability, The Amount Received Under Section 10(D) of the Income Tax Act, 1961 will also be tax-free.

6) For Peace Of Mind:

Death Is Inevitable. You Can Have Peace Of Mind By At Least Ensuring Financial Security For Your Family In Case Of Any Unforeseen Situation. These Policies Will Help Them Tide Over Difficult Situations.

Types of Life Insurance:

There are mainly 6 types of life insurance policies:

1) Term Life Insurance:

This Life Insurance Provides You Coverage For A Pre-determined Term. If You Die Within Your Chosen Term, a A Pre-defined Amount  Paid To Your Nominee As A Lump Sum/monthly/annuity. If You Remain Protected During That Period, No Benefit Is Paid To You On Maturity Of The Policy. Its Premium Is Less as Compared To Other Policies And It Is More Affordable, Hence It Is Considered To Be A More Popular Policy.

2) Whole Life Insurance:

Under This Policy, You Are Covered For Life. The Policyholder Also Gets The Survival Benefit in this policy. In This, The Policyholder Can Withdraw Some Part Of The Deposit Amount After Some Time.

3) Endowment Policy:

This Policy Is Similar To A Term Policy, But It Provides Additional Benefits On Maturity. In This Policy, If The Policyholder Remains Safe Within A Certain Term, Then On Maturity He Receives A Lump Sum Amount Along With Benefits. If The Policyholder Dies During That Period, Then His Nominee Gets That Amount. 

4) Unit Linked Life Insurance (ULIP):

ULIP Offers A Mix Of Investment And Protection. The Premiums Paid By You Under This Policy Are Divided Into Debt And Equity Funds As Per Your Choice And Are Invested. You Can Also Switch Funds Within The Policy Term By Paying Some Charges.

6) Annuity Insurance Plan:

Under This Policy The Amount Deposited Is Accumulated As An Asset Which Is Given To The Policyholder Either In Lump Sum Or In The Form Of Annuity.


Choose A Life Insurance Policy As Per Your Capability And Requirement. Read The Related Documents Carefully. The Earlier You Start The Insurance Policy, The Lower The Don’t Delay, buy an premium. So Don’t Insurance Policy For Your Family’s Financial Security Today.

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