We always want to provide best lifestyle to our family . We invest in financial instruments to safeguard the future of our loved ones. However, the feeling of uncertainty always lurks, deep down. In order to protect your family against any mishap or eventuality having a life insurance plan is very important. If we talk about smart investment, then a life insurance plan is certainly the smartest investment option to achieve your financial goals.
The life insurance plan offers income replacement to the family in case of uncertain demise of the insured person, so that all their financial needs can be fulfilled for a long run. The life insurance plans are not only economical but it is also a great saving instrument to fulfill your future financial goal.
However, it is not mandatory in India to buy a life insurance plan but with the manifold of benefits offered by life insurance plans the perspective of purchasing a life insurance plan may vary. In case you are wondering that which the best life insurance policy to buy, then there is plethora of options available in the market to choose from.
Further in this article we will briefly discuss the reasons why life insurance policy is a smart investment choice to achieve long term benefit.
Replacement of Income
This is the foremost and the basic benefit offered by life insurance plan. A life insurance plan provides financial protection to the family of the insured in case of the uncertain demise of the insured person. By buying a simple term plan, you can safeguard the financial future of your loved ones. In case of uncertain demise of the policy holder the insurer pays the sum assured amount as death benefit to the beneficiary of the policy. Similarly, for life insurance plan also offers retirement
life insurance plan that offers a regular flow of income in form of annuity payouts during the post retirement
age.
Investment Benefit Apart from life protection, there is an array of life insurance plans like whole life plans, endowment plans, ULIP plans, pension plans, guaranteed income plans, growth plans etc. that provides an opportunity of growth of the invested premium amount. These plans not only offer maturity benefit but also provide comprehensive life coverage so that the insured can ensure a financial protection for their family future. Plans like whole life plans offers guaranteed income protection to the policy holder up to the age of 100. Likewise, growth plans guarantee returns to comprehend your future goals such as purchasing a car or home.
Loan Protection In the absence or demise of the insured the life insurance plans act as the impeccable shield to take care of the long-term loans and dues of the family of the policy holder when he/she is not around anymore. By choosing for the appropriate amount of the sum assured, your family will not have to bear the problem of loan repayments when you are absent. The sum assured amount paid to the beneficiary of the policy will be sufficient to pay off all the pending debts. Similarly, life insurance plans can also be held as collateral to avail long-term loans such as home loans.
Tax Benefits For every salaried individual paying an income tax seems to be a herculean task. Under the Section 80C of the Income Tax Act, deduction up to 10% of the sum assured amount of life insurance plans will qualify for income tax benefit. Similarly, under the Section 80 D of the Income Tax Act, deduction up to Rs. 15,000 towards premium payment is considered eligible for tax benefits.
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This is Yash sharma Sr. creative writer. I have written several articles on finance, insurance & loans & I like very much to write insurance articles.