As the name suggests, life insurance policy protects the financial risk that your family members or nominees may face after your death. In insurance market there are different types of insurance policies available to choose, but we suggest you to choose the one which benefits you most.
Here in this article we have tried to find out the major benefits that you can get by taking life insurance policy.
A typical life insurance policy will have following three benefits;
- Cover financial risk of your life
- Tax benefits
- Return on your investment
Death is uncertain. No one wants to leave behind their family members in financial uncertainty after their death. Things will be more complicated if you are the only earning source to your family members. If you don’t want that to happen and wants your family members to be financially secure after your death then life insurance policy is the best option for you.
To know your exact need or value of life insurance requirements, you need to first ascertain the amount that your family members required for their living, and then find out the premium amount that needs to be paid for it. If the periodical premium amount is within your budget then go ahead or else recalculate it.
While calculating your family’s future requirements you need to take inflation into account as it affects future cost of leaving.
Income tax act also provides tax benefit for the premium amount that you paid to your life insurer during the financial year. Under section 80C of income tax act, you can claim deduction of up to Rs. 1, 00,000 per year from your taxable income.
Based on the policy chosen, you will also get certain return at the end of your policy. Generally, return on your insurance policy is within the range of 7%-8% per year. However, in case of term plan you will not get any return, this is applicable only to endowment policy.
We suggest every Indian to have an insurance policy based on their requirements. You can choose one for your requirements based on the offer that insurance companies are offering.