Overview of life insurance:
Life insurance is a policy which is designed to support the family of the insured in the event he dies. It is a type of contract which states that if a policyholder gets to die, then the insurance company has to give a sum-assured to his family or nominee. As life is amazing but surrounded by uncertainties. It is essential to save some money for the family members so that they can live their life hassle-free when you are not around.
Features of life insurance:
As features of life insurance policies vary from company to company. But the most common features of the life insurance are listed below-
- Accelerated death benefits.
- Long-term care riders.
- Spouse or children plans.
- Minimum age to avail this plan 18 and maximum is 65.
Types of life insurance plan:
There are mainly five types of life insurance plans are available in the market that is listed below-
- Terms insurance plan.
- Endowment plan.
- Money-back plan.
- Whole life policy.
Benefits of life insurance plans:
Life insurance offers several benefits, but here we have listed the important one-
Tax benefits: Life insurance policy comes under the act of tax deduction section 80C of the income tax. In addition, the death benefits offer to the policyholder is also tax-free. According to the income tax act, a tax deduction is applied on premium up to 20% of the sum assured. You can save a huge amount of money if you opt for life insurance.
Guarantee of fix return: At the end of the maturity period, a policyholder will receive a guarantee of fixed return as per your financial goals, you need to select the life insurance product.
Financial security: It is one of the most significant reasons why people opt for life insurance. This insurance plan gives you peace of mind to live a life hassle-free. For any reason, if you are not with your family, how they will sort out their expenses, substantial savings give them the strength to fight against all the debts and personal expenses. So, if you want to provide a gift for your beloved one then give them financial security via life insurance.
Death Benefits: On the demise of the policyholder, the insurance company will give a lump-sum amount to the nominee, and that is known as death benefits. The difference between sum-assured and the death benefits is that a sum-assured is a minimum guarantee amount gives you a policyholder. In contrast, death benefits are ten times higher than the sum assured.
Buy young and save more: A significant benefit you will receive if you avail for the life insurance policy at the young age is the ability to lock in low premiums rates. When you buy the life insurance policy in older age, you have to pay much higher premiums.
Final Say: We hope this comprehensive guide on the life insurance policy will help you a lot. The life vulnerabilities are health emergency, accidents and sudden death. To fight against these vulnerabilities, you have to opt for the life insurance plan, which can be proved as the best assets for your family when you are not with them.