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Life insurance acts as a financial cover for contingencies related to human life, such as death, disability, accident, retirement etc. Human life faces risks of death and disability due to natural and accidental reasons. Whenever a human life is lost or a person gets disabled permanently or temporarily, loss of income may follow and bring financial troubles for the household.
Urban Indian cities like Ghaziabad often see a higher risk to life due to rising population, stress levels, fast-paced lives, lifestyle-related ailments, etc. Ghaziabad is located in Uttar Pradesh and due to its proximity to the national capital of Delhi, it has gained popularity among people looking for good residential areas. As more and more people continue to migrate to this city each year, Ghaziabad is fast becoming the preferred choice for shelter in a good locality and within budget.
Here, we will discuss the importance of life insurance in cities like Ghaziabad and highlight some of its features while understanding the core meaning of life insurance for first-time buyers.
Human life in urban cities like Ghaziabad tends to face the following risks:
Therefore, life Insurance is essential:
In urban cities like Ghaziabad, any individual who has a family to support and is the sole breadwinner of the family must have a Life Insurance cover. The same goes for housewives of the family as they contribute to many aspects of the household. Children can be considered eligible for life insurance as they have their future earning potential can be at risk.
The amount of life insurance cover required in Ghaziabad depends on many factors such as:
Some of the key factors to know about life insurance plans are:
Additional Reading: What factors affect my life insurance premium rates?
Some of the benefits of buying a life insurance cover in Ghaziabad are:
Life insurance protects individuals and their families, in case of any unfortunate event in the insured individual’s life. The insurance provider pays the sum assured to the beneficiary or family of the insured as specified in the insurance contract along with any applicable bonuses. This death benefit comes in handy to meet any financial needs of the family.
Some whole life insurance policies provide dual benefits of insurance and investment. Half of the insurance premium goes toward insurance and the other half is invested in equity, debt or hybrid instruments. Thus, the insured gets the benefit of protective coverage and high returns on investment. One can further benefit from this aspect by investing in funds that are in line with one’s investment horizon and risk appetite. Certain policies also allow switching between funds as per one’s changing goals.
Life insurance policies can also act as a savings instrument since some of these offer maturity benefits. In case the life insured survives the policy term and no claims are made, the total premiums paid are returned during the maturity of the policy. Thus, the life insurance plan provides a savings component while offering a protective cover.
Under Section 80C of the Income Tax Act (ITA), individuals can minimise their tax liabilities by choosing specific investment instruments. One such is term life insurance. Under section 80C, the premium towards a life insurance policy is eligible for a maximum tax deduction of up to Rs. 1.5 lakhs. Additionally, under Section 10(10D), any payouts received from an insurance policy are entirely tax-free (as long as the annual premium does not exceed 10% of the total Sum Assured). Those who have opted for a health-related rider, like critical illness or surgical care rider can also avail of tax deductions under 80D of the ITA.
Additional Reading: Best Loans That Can Give You Great Tax Benefits
Cover for Liabilities
To achieve some dreams or life goals, there is always certain financial support required. For this, one may take loans, mortgages and use other debt sources. Dealing with such debt obligations can be a financial strain, especially in the absence of an income source. While one could arrange funds to party pay off the loans, the borrower’s family may find it difficult to repay liabilities in case of his/her unfortunate demise. Thus, a life insurance policy can ensure that the dependent’s family has sufficient financial means to repay loans and mortgages even in the individual’s absence.
Life insurance is an absolute necessity in crowded cities like Ghaziabad. It minimises risk and acts as a protection tool for the insured and their dependents in more ways than one. By looking at the key features and benefits of a life insurance policy, people in Ghaziabad can make an informed decision while buying a life insurance plan.
1. Which are some of the best insurance providers in Ghaziabad?
Some of the well-known insurance providers in Ghaziabad include Life Insurance Corporation of India, Max Life Insurance company, HDFC Life Insurance company, ICICI Prudential Life Insurance company, etc.
2. What are the four common types of insurance available in Ghaziabad?
Some of the commonly opted insurance categories in Ghaziabad are life insurance, health insurance, home insurance, and car or vehicle insurance.
3. What is the oldest age to buy life insurance?
Most insurance providers issue a policy to individuals within the age of 85. In general, many insurers also set the maximum age as 75 for those seeking life insurance.
4. What's a better term or whole life?
Term plan only protects for a limited number of years, whereas whole life offers lifelong cover if one can continue the premium payments. Whole life premiums may cost far more than term policies that offer the same death benefit. Thus, whole life may not be an ideal option for budget-conscious insurance seekers.
5. How many insurance policies a person can buy in his/her life?
There is no defined limit to the number of life insurance policies one can buy in India.
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