What Is A Life Insurance?

What Is A Life Insurance?


Life insurance is a contractual obligation between the life insurance provider and the insured, wherein the life insurance company undertakes to give financial life insurance coverage to the individual in exchange for a regular premium payment that extends over a pre-defined tenure.

Given below are the reasons why you should buy life insurance at the earliest and important benefits of availing the same.

Why Buy Life Insurance?

Following are some of the main reasons for purchasing life insurance online.

1. Meeting the Financial Needs of your Family

Are you the only breadwinner in the family? If yes, your dependents would require a regular and apt source of income for meeting their daily needs in case you pass away prematurely. In order to help them maintain their current standard of living, and also take care of unfulfilled life goals like marriage or higher education of your kids, it is essential to invest in a life insurance policy that provides the maximum returns at the least possible costs.

2. Repayment of Debt

If you have borrowed funds from family members, colleagues, or friends; or in case you have taken up a home loan, auto loan, education loan, or a personal loan to attain different milestones; it is important that you arrange for a financial resource for repaying the same in the event of your untimely death. A life insurance plan surely comes in handy as it assists your dependents or spouse in repaying the debts to your name in your absence.

3. Investment and Loan Features

Along with providing adequate life coverage to customers, life insurance plans purchased online can be used as tools for mortgage or loan repayments. Do know that loans can be availed against life insurance plans in India and are being considered as useful sources for financing purposes. Also considered as useful investment instruments, they have the potential of delivering good returns. You may choose the sort of coverage you need by opting for child insurance plans, term life insurance plans, retirement plans, whole life insurance plans, etc.

Benefits of Buying Life Insurance

Life Insurance policies available online provide a vast range of benefits to individuals. Following are among the most important of the lot.

1. Risk Cover

Life plans take care of the uncertainties and risks that may come in the way of the happiness of yourself or your loved ones. By availing the requisite life insurance policy online, you can ensure quality lifestyle for your family even in the event of unforeseen or accidental death.

2. Comprehensive Plan for Various Life Stages

LIPs double up as long-term investments and enable you to set down your life goals and objectives. Be it for constructing your dream home or planning a blissful after-retirement life, you may choose to invest in the plan that syncs with your risk appetite, life stage, and maturity benefit goals. The conventional life insurance policies, especially of the likes of endowment plans, are known to offer specific maturity benefits as well as built-in guarantees through options like Guaranteed Cash Values, Guaranteed Maturity Values, Money Back, etc. – choose accordingly.

3. Coverage for Increasing Health Costs

Be it via stand-alone life insurance policies or with the help of riders, most life insurance companies in India are known to provide financial cover for hospitalization expenses, critical illnesses and other types of medical treatment. As these health expenses are spiralling skywards, the need for health insurance – in the form of individual, group and family floater plans – is increasing with every passing day,

4. Guaranteed Income through Annuities

Life insurance policies are immensely helpful in planning for your retirement as they help you save a good amount of money across a period of time. The money thus saved is returned in the form of a steady flow of income once you retire from your professional life – obviously, with added benefits!

5. Tax Benefits

Tax savings u/s 80C of the Income Tax Act, 1961, paves the way for tax deductions with regards to life insurance premium payments.

Way Forward

In case of term life insurance or life insurance with death benefits only, a lump-sum amount is given to the beneficiaries /nominees assigned by the policyholder in the event of his / her untimely death. The amount so paid comprises of the sum assured that was agreed upon at the time of the purchase of the life insurance plan and the bonus amount added across the years.

Along with death benefits, some life insurance plans also provide maturity benefits in the guise of payments, especially if the policyholder manages to survive the term. You may want to check out different life plans in terms of their features and benefits on life insurance aggregator sites like before freezing your selection.

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