Life insurance is one such financial product that every individual should consider investing in as it offers a plethora of benefits. From helping you accumulate a strong financial corpus to securing the lives of your family in our absence, life insurance investment is vital. If you are the breadwinner of the family or are looking to save for the future, then here are certain important features of life insurance you should be aware of.
Life insurance is not just an investment product: The purpose of life insurance policy is not just to invest your money. Rather, a life insurance plan is purchased to insure your life. Since most of the life insurance plans offer maturity benefit after the duration of the plan, but you should just not necessarily invest in a life plan for this reason. Life insurance as a financial product also works as it provides your family financial assistance on your unexpected demise. The primary objective of a life insurance plan is also to secure your family members by providing you a life cover.
The family’s breadwinner can just not purchase life insurance: Ever thought about what happens when a stay at home person dies? You can even buy a life insurance plan for your mother, parent and even your kid. Life insurance plans are just not meant to be a source of income replacement on working individual’s demise. You can easily insure the life of all the contributing members of the family by buying a life insurance plan. For instance, what if tomorrow your wife dies, who will look after your kids when you are at work? At such times, you will have to hire a nanny to take care of your child. So how will you bear the fee charged by nanny? Think about such instances wisely and insure all your family members with a life plan.
Life insurance is not only an income replacement tool: Even if the other members in your family are working individuals, it is a must you buy a life insurance plan. Life insurance not just replaces your income, but also helps your family member fade off all the loans and liabilities held by you. Hence, it is significant you buy a life insurance plan even if there are other earning members in the family.
Life insurance helps you save for long-term: Investing in life insurance is a systematic way of safeguarding your family’s financial future; it helps you save and build a heavy financial corpus for yourself and your family. It also helps you financially take care of your child’s education, marriage, retirement, etc. while also getting life cover. Therefore, by investing in life insurance you get the dual benefits of savings and well as protection.
Tax savings: The premiums you get out of a life insurance policy make you eligible to receive tax deduction of up to 1.5 lakh under section 80C of the Income Tax Act, 1961. The death benefit too is tax free under section 10(10D) of the ITA.
Life stage planning: If you and your family has several financial goals that require planning, then investment in life insurance can be of great help. They help you fulfill your financial goals such as child’s education, marriage, retirement planning, etc.
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