Life Insurance Benefits

Following are the benefits of purchasing life insurance plans:

1. Life Cover: A life insurance policy provides a sum assured as the death benefit in the event of the demise of the policyholder, thereby providing financial security to the insured family. Life insurance thus acts as a shield and ensures that the goals and aspirations of the insured's family members are not affected even in his/her absence.

2. Peace of Mind: Life Insurance helps creating a sense of peace of mind for an individual because it ensures that the policyholder gets life coverage and also ensures that the policyholder's loved ones are financially secured at the time of the untimely demise of the policyholder. Life insurance also provides financial aid at the time of medical emergencies that decreases the stress to arrange funds right at the same time.

3. Tax Benefits: Life insurance premiums qualify for tax deduction under Section 80C of the Income Tax Act. Also, as per Section 10D, the sum assured received on maturity of the life insurance plan is tax-free if the premium is up to 10% of the sum assured or the sum assured is at least 10 times the premium amount.

4. Availability of Loans Against Life Insurance Policy: Life insurance plans provide an option to take a loan on the existing insurance policy to overcome any urgent requirements of the policyholder. The policyholder can borrow a certain amount without affecting the benefits that are already being offered in the life insurance. The availability of loans on insurance plans is available for some insurance plans only.

5. Income Benefits: Life insurance plans such as Money-Back Insurance plans provide an option to create regular income in intervals for the insured's loved ones in the event of the untimely death of the policyholder. This ensures that the insured's family member is financially independent and secured.

6. Critical Illness Cover: Some life insurance plans include critical illness cover. Critical illness can sometimes be inbuilt in the life insurance plan or it can be purchased for additional coverage along with benefits under the life insurance plan. Critical illness cover provides financial support at the time of diagnosis of any critical illness that is listed under the insurance companies. This cover also provides financial aid for expenses made at the hospital for treatment.