You need to get Insurance cover, if you know that you are the only source of income for your family.
There could be several reasons too for life Insurance cover. Your loan/ mortgage payments, your wife/ spouse and childrens, your business, pension, etc. These are some reasons why people opt for life insurance. Unless you have a valid reason to insure your life, don't do so.
It is important to know that a life insurance policy will simply ensure your family spend their lives in relative comfort. You will have to define your objectives before you go for an Insurance cover.
Taking out a policy for insurance involves making crucial decisions such as how much you want to be covered for. Some people take out a insurance cover policy for an amount that they cannot afford to pay for. Always ensure that you take your budget into account before you pay for a life lic policy.
What is insurance
Insurance is a contract between the insurance company (insurer) and the policyholder (insured). In return for a
consideration (the premium), the insurance company promises to pay a specified amount to the insured on the
happening of a specific event.
life insurance, can
safeguard a person against unexpected events.
Insurance is :-
Investment option |
Insurance products are an excellent investment option where the policyholder not only gets the advantage of insurance cover but also a return on their investments based on their risk appetite. |
Protection of financial security |
Insurance companies provide compensation in case something happens to the assets or the individual insured, as per the terms and conditions of the policy. Life insurance protects the family against the loss of the income provider helping to provide for the family's needs and the children's education and marriage. Hence the effect of loss is considerably reduced for an individual. |
Tax benefits |
Insurance offers considerable tax benefits under the Income Tax Act 1961. Premium paid up to Rs. 1,00,000 qualifies for deduction from taxable income under Section 30C of the Act, subject to certain terms and conditions. The death benefit or the maturity benefit received by the nominee or the policyholder is tax-free under Section 10 (10D] of ti1e Act, as per prevailing laws, before premium paid up to Rs. 1,00,000. |
Planning for life stage needs |
Today the insurance products that are being offered by insurance companies are designed to suit the needs of individuals it different age groups. This allows individuals to invest in insurance policies to meet their various and changing priorities. |
Develops the habit of saving |
An individual learns to save a certain amount of money from their income in order to pay their insurance premium. This encourages the habit of saving among individuals. |
Loan against insurance policy |
Individual can also take out a loan against their insurance policies, subject to the conditions and privileges of the policy, without affecting any policy benefits. |
Releases capital and management |
When the management of a company knows that many of the risk faced by that company are covered by insurance, they no longer need to set funds aside to cover the impact of those risks taking place. They are also free to concentrate on developing and growing their business. This makes the company more effective, which in trim helps to improve the overall economy of the country. |
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