We all want to ensure that our loved ones live a comfortable life, even if we are no longer there to provide for them. A life insurance policy is one such instrument that can give you the guarantee of securing your family’s financial future, even in your absence.
The best life insurance policy in India will give your family a protective cover against life’s eventualities. Here are some of the benefits of investing in a life insurance policy.
Financial security
Having the security of the best life insurance policy in India offers you the peace of mind that your family will be taken care of if something happens to you. The financial cover provided by the policy will help take care of their daily expenses and also allow them to pay off any liabilities that you may have left behind.
Creates wealth
Depending on which life insurance policy you invest in, some of the plans give you an option to create wealth over a period of time. Apart from giving you an adequate life cover, they also invest a portion of your premium in different investment options to help you grow your corpus with the help of handsome returns. For example, if you invest in ULIP, you can invest in debt, equity, or hybrid funds as per your risk preference.
Tax benefit
Unlike tax-saving Short Term Investment Plans that usually tax the maturity benefit, life insurance gives you dual benefits of keeping your premiums and benefit tax-free. You can claim tax deductions up to Rs. 1.5L per annum u/s 80C of the income tax act. At the same time, section 10(10D) offers you tax-free maturity benefits.
Young investors save more
The best life insurance policy in India will allow you to enjoy low premiums if you start investing at a young age. Buying the same policy when you are older will attract a much higher premium. Therefore, consider investing early and save tons of money in the long run.
All-rounder product
A life insurance policy is a must-have in your investment plan because it is an all-rounder product that takes care of all your financial needs at different life stages. All you need to do is assess your needs and choose the best life insurance product suitable to those needs. For example, if you are looking for a low-cost, high-coverage insurance plan, you can consider investing in term insurance, which is the simplest and the purest form of life insurance.
Secure your child’s future
In India, it is a norm for parents to fund their children’s education. An average Indian spends more than Rs. 10 lakhs on paying for their higher studies. By investing in child insurance plans, you will be able to plan your child’s future with much more confidence and also secure their finances with the help of life insurance cover. Such policies, often in the form of ULIP, can also help you grow your investments to meet bigger goals in the future, such as paying for your daughter’s wedding.
Protection against critical illnesses
With the rising cost of medical care in India and the increase in lifestyle disorders, it has become necessary to invest in a robust life insurance policy with a critical illness rider to secure yourself against serious illnesses. In the absence of its added cover, you risk losing all your savings to expensive medical treatment. A critical illness rider can be added to your policy by paying a nominal premium. This rider will get activated if you are diagnosed with a critical illness listed in the policy document, and you receive a tax-free sum assured from the insurer to spend the money as you please. Unlike health insurance, you have complete autonomy over the amount you receive as a death benefit.
Retirement planning
A life insurance policy can also be used for retirement planning purposes. Many life insurance plans come with pension benefits to secure your old age with a steady flow of income when you retire. If you start planning for retirement at a young age, you will save an enormous corpus of funds that will help you lead a financially comfortable life after you are retired. These plans are designed as annuity plans that enable you to meet your post-retirement needs such as medical or living expenses to ensure that you live out your golden years with dignity and also secure the finances of your loved ones, should something happen to you. There are all kinds of life insurance plans available these days. Choose the ones that meet your financial and lifestyle needs and add them to your investment portfolio.
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