Need and Benefits of Buying Life Insurance Plan

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Need and Benefits of Buying Life Insurance Plan
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• A life insurance plan is not a liability or
  even a mere investment option. It is a crucial
  support system and a way to give financial
  protection and stability to an individuals
  family or dependents in the event of his or her
  accident, illness, death, etc. The concept of
  life insurance has been there since ancient
  times. Today, there has been a growing awareness
  among people about the importance of choosing the
  best life insurance policy that suits their
  personal needs.

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• Under a life insurance plan, the insurance
  company pays a lump sum amount to the
  beneficiaries of the policy holder. Life
  insurance policies are promoted as investment or
  saving schemes and the best life insurance plans
  also promise a gamut of benefits for the insured.
  

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How one can gain from life insurance plan?

• Tax Benefits An insured person can avail
  additional benefits in terms of tax exemption, up
  to Rs 1.5 lakh, for the premium paid as part of
  the policy, under the section 80C of the Income
  Tax Act 1961. There are certain policies that
  provide benefits on maturity which are also
  entitled to offer tax deductions on the maturity
  earnings, under the section 10 (10D).
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• Investment and returns The best life insurance
  policies prove to be effective financial planning
  tools for individuals and bring long-term
  benefits. They help in better money management
  and often considered as a perfect plans to fulfil
  ones retirement goals. Besides retirement
  planning, they also serve investment tools to
  support other stages of life such as education,
  marriage of child, building home, etc. With the
  underlining feature of better returns on
  investment, life insurance plans ensure security
  of ones finances and lower risks.

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• Emotional and Financial support Insurance
  companies promote their best life insurance plans
  with the primary objective of guaranteeing not
  only financial support for the beneficiaries
  during loss of income, but also psychological
  support when a family is going through difficult
  times.
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• Availing loan against policy When choosing the
  best life insurance, an individual should know if
  the policy provides a provision which lets the
  policy holder avail loan in case of urgency, to
  take the amount of loan either in the percentage
  of the insured sum or as the cash value. The loan
  can be secured from the insurance company or
  through any non-banking financial company (NBFC),
  at competitive rates much better than other
  modes.

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How it works to benefit the insured?

• A life insurance is an insurance policy or
  basically an agreement between an insurer and the
  policy holder by which a designated sum of money
  will be given to the beneficiaries by the
  insurer. The payment, done in exchange for a
  premium amount paid regularly or as lump sum, is
  executed in the event of death of the insured
  person. Sometimes, cases such as terminal illness
  or critical illness are also considered. On
  approaching the insurance company, individuals
  looking to buy life insurance plans are required
  to follow certain simple steps involving
  application submission for availing the policy.
  By thoroughly reading the terms and conditions,
  potential policy holders get a clear
  understanding of the benefits they would be
  having and also about the generic exclusions, for
  instance, pre-existing medical condition,
  suicide, etc.
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• In order to get the maximum advantage from
  an insurance policy, individuals should compare
  the various policies in the market and choose the
  best life insurance plans among the many. They
  should keep in mind some points such as the scope
  of policy cover for the set amount or the claim
  settlement ratio. Companies with the best
  insurance plans make it a point to ensure speedy
  and hassle-free claim settlement. Moreover, the
  flexibility of customising a plan is another
  factor basis which life insurance plans are
  compared. Since different individuals have
  different needs, the option of customization
  becomes a necessity and not a luxury. The extent
  and number of deductibles by the company can be
  regarded as another important factor for
  comparison.
• Keeping in view the above points and the
  host of benefits offered by life insurance plans,
  people should realise why having a life insurance
  plan is a must in todays times, especially when
  it comes to securing a familys future.
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