There are multiple reasons why you must consider buying life insurance plans, and the pandemic is proving it again. Life insurance policies offer financial protection to your loved ones if you cannot be there. The policies come in different types, such as term policy, whole life policy, Unit-Linked Insurance Plan (ULIP), and more.
A life insurance plan ensures that your dependents can maintain their standard of living in your absence. When your nominees make a successful claim, the insurance company pays them the sum assured and any other benefit offered by your life insurance policy.
Here, we list five reasons why you must consider buying a life cover.
- Many benefits
Every individual has their priorities. While some people might prefer an inexpensive life insurance policy to protect their family, others may want to treat the policy as an investment opportunity. For example, if you want the benefits of life cover along with an option to create wealth, a ULIP will help you with this objective.
Conversely, you can purchase a term life insurance policy that offers a substantial death benefit at an affordable price. However, it does not have any maturity benefit. For that, you can consider a whole life insurance plan that covers you until the age of 100. If you survive the policy tenure, the insurance provider pays a maturity benefit.
- Tax exemptions
The fundamental purpose of buying a life insurance policy is to ensure that your loved ones have a financially secured future. To do so, you need to pay premiums on time and keep the life cover active. If you are worried about the cost, the policy’s tax deductions should make you happy.
One of the best things about life insurance policies is that the Income Tax Act,1961 offers tax deductions to policyholders. As per Section 80C, you get an annual exemption of up to INR 1.5 lakh on the premium paid. Moreover, the maturity and death benefits are tax-free as per Section 10 (10) of the Act.
- Affordable premium
To keep the life insurance plan active, you have to pay a regular premium to the insurer. The amount depends on factors such as the type of life cover, payment frequency, and sum assured, among others. As a result, you will find different policies with varied pricing. This allows you to purchase the one that fits your budget.
For example, a term life insurance plan is the most economical option available in India. It offers a larger cover at a low premium compared to other life policies.
Add-ons (riders) make your existing life insurance policies more comprehensive. Riders are additional covers that you can include in your existing life policy. You have to pay a higher premium, but the riders prove valuable in certain situations. For example, suppose you have a critical illness rider, the insurer will pay a lump sum to cover treatment expenses if you are ever diagnosed with any illness included in their list. Besides critical illness, you can buy an accidental death benefit or a waiver of premium rider for enhanced protection.
- Mental peace
With a policy like whole life insurance or term plans, you ensure your family’s security and peace of mind. When you know you have done everything in your power to protect your loved ones, there is no more reason to worry. So, you can lead a stress-free life with the family.
With different types of life insurance policies available, you can find the most suitable one. Once you determine which life plan you need, it will take minutes to purchase it from the insurer’s website.