Is Life Insurance Worth It?

Is Life Insurance Worth It?
Conclusion

Life insurance is a great way to financially secure your family from the uncertainties of life. In your absence, a life insurance policy can provide financial resources or an income source to your family so that they are able to maintain a healthy lifestyle and achieve their goals. Proceeds from a life insurance policy can help your family fulfil their daily expenses, pay off outstanding debts etc. even in your absence. There are different kinds of life insurance policies available in the market such as Term Life Insurance, Unit-Linked Insurance Plans, Endowment Plans, Money-Back Plans, Child Life Insurance and Retirement Plans. One can choose from these plans according to their requirements, term life insurance plans are protection plans and work the same as traditional life insurance plans but other categories are considered life cum savings plans.

Is Life Insurance Worth It?

There are many arguments related to life insurance being used as an investment tool. Below mentioned are few most widely advocated benefits of purchasing a life insurance policy for financial planning:

Tax Exemptions: A major benefit of purchasing a life insurance policy is that a life assured can avail of tax exemptions. A life insured can avail of tax exemptions for all the premiums paid towards a life insurance policy under Section 80C of the Income Tax Act,1961. Under this section the life assured can avail tax exemption for up to Rs. 1.5 Lakh for the premiums paid, given that the premiums do not exceed 10% of the sum assured.

Financial Security: Purchasing life insurance will provide a person peace of mind, as a life insurance policy ensures the financial security of the family of the life assured in case of an untimely death of the life assured during the policy tenure. With a life insurance policy, the life assured can ensure financial aid for his/her family which can help them fulfil their immediate financial needs, daily expenses and achieve their goals in the absence of the life assured.

Enhanced Cover: Under a life insurance policy, the life assured has the option to enhance the base cover by adding riders to the policy at the time of policy issuance. Riders are also known as additional coverages which come in exchange for an additional premium. Some popular life insurance riders are, critical illness benefit, accidental death, accidental total and permanent disability, accelerated terminal illness benefit etc.

Loan Against Policy: Some life insurance plans provide to get a loan against the policy at a nominal interest rate, which can help the life assured fulfil his/her immediate financial expenses. This helps the life assured to avail a considerable amount of liquidity under life insurance. The loan against the policy facility is usually available under ULIPs, Endowment, Retirement, or Child Life Insurance Plans. This facility helps the life assured to fulfil his/her immediate financial obligations, during the policy tenure.

Conclusion

Life insurance can be a good investment tool for financial planning. It should be a must-have for every individual who is the primary source of income for their family.

Also Read:

Top Term Insurance Buying Mistakes You Should Avoid

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.