We usually think of investing our money only after we have taken care of our needs. Usually there is not much left to save and we often lead our lives hand to mouth. Investing is then out of the question and it is delayed day by day.

The wise way to save and to invest money is to put a portion of your income away regularly and manage with what remains for your daily and monthly necessities. Investing funds into an investment plan is like sowing the seeds which will bear fruits in the future. Investing in Life Insurance is the safest way of good investment. You need to choose the right plan and with the help of a financial expert entrust your hard earned money into a policy.

Term Insurance Premium

Advantage of Life Insurance:

We all know that the universal benefit of having a life insurance. With your demise, your dependants get the maturity amount and you are rest assured that even without your presence, your family will be able to comfortably manage on their own. These benefits are usually true for all kinds of life insurance, however there are many other advantages of life insurance which depend on the type of policy and the amount of coverage extended. Apart from the following life insurance benefits there are benefits for women too.

To understand the benefits of life insurance these questions need to be answered:

  • What are the different types of life insurance benefits available to you and your dependants?
  • What do the different types of policies offer to you as benefits?
  • How can you get more value for money spent on life insurance?

The more life insurances you invest upon, the more security your dependants are going to enjoy. If one policy pays you 1 lakh rupees after your demise, it barely will take care of all the funeral expenses and religious rituals. Having more than one policy can provide a peace of mind for your dependants which can take care of income for the coming years, paying off your mortgage, debts, loans, credit cards and also kids education.

Beyond these, different kinds of policies can provide other benefits too:

  • i) Death benefit payments are usually tax free. Hence there are tax advantages of life insurance.
  • ii) Cash accumulated over time in some policies can be used to pay premiums later or even help to keep you afloat during retirement.
  • iii) Other types of protections could be added into your policy such as disability insurance to replace a part of your income if you are unable to work.
  • iv) Many policies entertain “riders” or additional contracts that provide a lot of benefits before death.

What is life insurance and how is it helpful?

If you are the only earning member of your family, you need to have a protective coverage plan that safe guards your family at the time of your demise. Keeping your family safe and sound even when you are not around is what the Life Insurance primarily does. It makes sure that your dependants get financial help and support. There are several types of life insurances which are made to address a variety of needs and requirements:

  • Term Insurance: These are the most affordable plans available and it’s the simplest form of life insurance. They cover life and protect our loved ones too.
  • ULIP: This is a combination of life insurance and financial investment. Unit Linked Insurance Plan also known as ULIPs offer amazing fund options and strategies. There is a lock in period of 5 years after which money can be regularly withdrawn.
  • Endowment Plan: Like the above mentioned plans, this plan too is a risk free investment plan and also offers an insurance cover. The traditional policies are not linked to the stock market, hence carry lower risk. Endowment Plan returns heavily depends on the market fluctuations. While the traditional policies have bonuses for keeping the policy holder invested.
  • Savings Plan : This plan also along with insurance cover offers investment opportunities. So in addition to securing your family financially, you also can create a lump sum saving amount which can be kept away for your retirements days or for the times you want to invest into something.
  • Whole Life Insurance Plan: This is a permanent type of insurance plan which covers you up till 99 years of age. The other policies are term defined say 5, 10, 15 or 20 years.
  • Retirement and Pension Plan: Not all of us are fortunate enough to have a government job that provides pensions on retirement. However, not to worry, we can make our own pension plan through this plan. We can accumulate funds and invest in such a way that you would be paid every month for the rest of your life.

What are the advantages of life insurance?

There are various advantages of life insurance. Let’s look at some of life insurance benefits:

Benefit 1:

Sound Sleep benefit: When you are financially secured by life insurance, you have peace of mind and will have a sound sleep. Everyone worries what will happen to their families when they have left this world. Believing in the fact that life insurance provides a safety financial net for the family after your demise is very comforting and relaxing to the human mind.

Benefit 2:

Creation of wealth: We love to create wealth and we would love it more if someone else creates it for us. So some insurance policies use your premiums to invest in different stocks as per their expertise and help you grow your wealth.

Benefit 3:

Saving Tax: Under section 80C of the Income Tax Act, premiums paid offer tax deduction. If you happen to pay 2 lakhs rupees premium annually, this amount is deducted from your payout and lowers your tax outgo. The maturity amount too comes to you tax free as per section 10(10D) of the Income Tax Act.

Benefit 4:

Buy Young, Save More – An advantage of life insurance plans gives you the choice to lock in low premium rates while you’re young. The same policy if bought when you are older will cost you dearly as the premiums you will have to pay will be much higher than for the younger you. For example, in case of a 30 year term plan, a 20 year old would buy a 1 Crore plan by paying Rs. 5955/- annually while a 30 year old would be paying Rs. 9009/- annually for the same plan. The younger you are, the more you save.

Life Insurance Benefits FAQ’S:

The question is, what are you looking for? Both policies provide death benefit, while whole life policies are more flexible and can provide additional benefits than term policies. The life policy premiums stay the same. Term life policies though have lesser benefits, they are cheaper than whole life policy.
The answer lies with you. How much do you need, depends on what all you need it for? Covering mortgage or children’s education or retirement allowances or all of these?
This again depends on your needs. With age life insurance gets more expensive.
On many occasions there are life insurance tax benefits. The death benefit of a policy holder is not taxable. If you have a Rs. 10,00,000/- policy, your family will receive the entire amount upon your death.

For more answers about life insurance:

Just contact any financial professional. They will take the time to learn about your needs, listen to your concerns, and explain the different insurance options that fit your situation and budget.

If you are an employee, taking advantage of your benefits at work is a smart and affordable way to get the financial protection you want for yourself and your family. Contact your HR department to review your plan details and determine how much life insurance is available to you. Your employer may provide life insurance as a benefit, or you may opt to pay for additional life insurance through payroll deductions.

Life insurance fills financial gaps that exist in your lives. As an all-rounder product, life insurance can take care of your different financial needs at different stages of life. All you have to do is identify the need, and there is a suitable life insurance plan for you.

The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale

Consult with your financial advisor before making any decisions on insurance purchase.

*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time’

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