Ways Your Insurance Policy Works For You

• Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
• Convenient payment options - annual, half-yearly, quarterly or monthly premium payments
• Do more with plans that offer pure protection, retirement planning and investment options

You must have often heard about how having a life insurance is so important since it provides cover and protects your family in case something happens to you. However, as a customer, the only conception you might have of life insurance is its ability to provide you with cover, but there are various other reasons why it is a must to have an insurance policy. Your life insurance policy does not only provide you cover but also takes care of you through other manners. Some of them are given below:

1. Taking care of your loved ones: Insurance policies are designed primarily to take care of your loved ones in your absence. Regardless of the type of policy you choose, it will protect your loved ones from any type of financial trauma that they may experience in your absence.
2. Helps take care of immediate financial liabilities: You may have invested in some investment tools or taken a loan so that you could help fulfill the future dreams for your loved ones. In case you are not around tomorrow, financial liabilities such as repayment of loans may prove to be a huge burden for your family members to take care of. Thus, having a life insurance policy helps monetarily in clearing off those financial liabilities by providing the nominee with a lump-sum amount called the death benefit and ensures that your family is safe from any financial tensions.
3. Provides cover in case of illness: You may never know when an illness is going to hit you. If you are the only earning member in your family, you may have to take an extended leave of absence which may prove detrimental to your family from a financial point of view. There are various life insurance policies which provide critical illness riders. These riders not only add an extra layer of protection but also allow you to take care of your medical expenses.
4. Retirement benefits: It is always good to plan for life, post-retirement. Hence, you may certainly want to build a corpus which would allow you to take care of your needs even after you have retired. Pension plans are such insurance products which not only provide cover but also allow you to maximise your wealth, keeping in mind your future goals.
5. Helps in saving: Having a life insurance policy helps you in saving so that you can pay your premiums, which ultimately instills a sense of financial discipline in you.
6. Provides steady income: A life insurance policy is not only designed to simply provide cover, but also can be a source of regular income for you. Insurance products like money back plans not only provide you cover but also ensure that you receive a regular flow of income which will allow you to take care of your day to day needs.
7. Other Benefits: Products like term insurance only provide a lump-sum amount in case of your death and the plan ceases to exist. However, insurance tools like whole life insurance policies not only provide you with a death benefit in case of your death but also provide you with maturity benefits in case you survive the plan term.
8. Helps in achieving long-term goals: You may have various long-term goals such as buying a home or taking care of your children’s education which can be fulfilled by having life insurance. There are various products such as ULIPs which are an insurance-cum-investment tool. They not only provide you with protective cover, but also help you in investing your money in various market instruments which can ultimately help you plan for the long run and achieve your long-term goals.
9. Option to take a loan: There are various insurance policies which also offer you loans in case you are in dire need of money. You are generally allowed to take a percentage of your sum assured as the loan amount, depending on the policy’s terms and conditions.
10. Tax benefits: It goes without saying that life insurance helps in saving on taxes. You can claim tax exemption under Section 80C of the Income Tax Act, 1961.

Hence, you can see that having life insurance is beneficial in many ways. Having life insurance means that your mind is at peace knowing that the future of your loved ones is safe and secure financially, even if you are not around in future. Apart from providing cover, there are plans which also help you maximise your savings and build a corpus so that you can take care of your long-term goals. There are insurance products which not only pay a death benefit, on the sudden death of the policyholder, but also pay a maturity benefit if the policyholder survives the policy term, in addition to helping save on tax. Thus, you can see that there are various reasons why having life insurance is so beneficial and purchasing it as soon as possible will only help you in the long run.