Life insurance is needed as it offers financial protection to individuals who are dependent on the policy holder after his/her death.
Reasons to apply for life insurance
- Risk coverage
- Life insurance offers risk coverage to the family that is insured in the form of money in lieu of the premium that is paid by the insurance holder. This is very beneficial to the beneficiaries.
Various plans for different uses
Insurance agencies provide various typed of plans to an individual based on his needs, requirements and standard of living. There are additional benefits with a higher premium.
Cover for health expenses in some cases
In some cases, the insurance policy also covers hospitalization expenses and treatment for critical illness. This offer is based on the plan chosen.
Promotes the habit of saving
As the policy holder pays a regular amount to the insurance company, it promotes a healthy habit of saving or setting aside money for other future expenses.
Helps in wealth creation for beneficiaries
The individual who invests in life insurance has invested their money in a profitable investment for their beneficiaries. This can help the beneficiaries financially in the future.
Has a guaranteed income
Life insurance has a guaranteed sum of money that is assured to reach the beneficiaries if the policy holder unfortunately passes away.
Has Tax benefits
Insurance premiums that are paid are tax deductible under section 80C of the Income Tax Act, 1961.
Additional Reading: How Much Life Insurance Do You Really Need?