Life Insurance

Definition:

Life insurance is an insurance policy plan which provides compensation in terms of loss of life of the insured person. In this policy, the insurer pays the compensatory amount to the beneficiary mentioned in the insurance policy by the insured person.

When it comes to life insurance there are various benefits an insured person and his or her family can avail from, some are as follows:

1. Covers Medical Bills:

This insurance policy might not cover the dental bills and other expenditure, but the life insurance policy helps in covering emergency medical bills along with critical illness medical bills of the insured person. Therefore, Life insurance also helps in providing emergency fund during accidents.

2. Savings plan:

Life insurance is more like a saving plan for the future. Since you never know what might happen in future and sometimes the maturity date arrives of the life insurance; this factor itself reveals how life insurance is also treated as a savings plan by people across the globe. Although it helps in providing monetary compensation to the insured person’s family, if the maturity date arrives earlier then the whole amount along with interest is paid back to the insured person.

3. Tax benefits:

Applying for insurance and paying the premium helps in increasing the tax benefits as the life insurance premium is deductible under the section 80C of the income tax Act, 1961.

4. Different companies, different plans, different benefits:

Each company which provides life insurance have various types of life insurance plans which in return provide various benefits to the insured person. Higher the premium is being paid or chosen, more benefits will be provided to the policyholder. Therefore many people end up choosing the policy which helps in providing maximum benefits at the premium they want.

5. Policies can be changed:

After the insured person starts paying the premium, the amount of premium or the policy plan can be changed and the rate of the premium will be further increased or decreased accordingly. This can be changed at any point of time while the policy is active and the premium is still being paid by the insured person.

Life Insurance is a policy which can be treated as a savings account or a tax benefit through which you can earn money while paying the premium as savings for the future. This policy of insurance plan helps in planning for the uncertain future in the right manner and will provide support to your family during misfortunate times.