Key Features and Benefits of Life Insurance in India

Key Features and Benefits of Life Insurance in India;

1. Financial Security: A life insurance policy is an agreement between an individual and an insurance company whereby the individual pays regular premiums and, in the event of death, the individual designates beneficiaries to receive a death benefit. The death benefit is intended to provide financial security for the beneficiaries, such as covering outstanding debts or providing a source of income. There are several types of life insurance policies, including term life insurance and whole life insurance, each with their own features and benefits. It is important to carefully consider the type of coverage and the amount of coverage needed when purchasing a life insurance policy.
2. Death Benefit: In case of any unfortunate death with the policyholder, the insurer provides financial protection in form of a death payout. The appointed nominee (spouse, children or parents) receives the entire sum assured plus the bonus accumulated over a time.
3. Maturity Benefits: When the policy matures, some life insurance plans offer the policyholder the full premium amount paid during the policy term.
4. Guaranteed Returns: Life insurance plans guarantee that you receive a fixed amount after a specific term. The return you get can help in paying the loan, child’s higher education, and other expenses.
5. Wealth Creation: Life insurance Savings plans such as ULIPs offer wealth creation benefits also. In such plans, you can invest your premium amount in different funds based on the risk appetite. These life insurance policies are good wealth-makers in the long run
6. Tax Benefits: Policyholders can avail of tax savings benefit up to Rs. 1.5 Lakhs u/s 80C of the Income Tax Act, 1961, for life insurance premium amount paid. Also, the payout received from an insurer is exempt from tax u/s 10 (10D) of Income Tax Act and the premium amount paid for riders such as critical illness can be claimed u/s 80D.
7. Riders: Riders such as critical illness, waiver of premium, etc. are add-ons to your current base plan, which help customize the policy according to your specific needs.
8. Flexible premium payment option: Policyholders can choose the frequency of premium payments as per their requirements. For example, you can choose to pay premiums as a lump sum amount for your life insurance policy, or could pay them at periodic time periods like monthly, quarterly, half-yearly, or yearly.
9. Retirement Planning: Annuity-based life insurance plans give a monthly pension to the policyholder on maturity and help plan a secured retirement.
10. Loan Facility: Certain life insurance plans provide the option of a loan and allow to borrow some percentage of plan value or the sum assured depending on the policy Terms and Conditions.