While buying a life insurance plan for yourself, it is necessary to know that life insurance not only provides you protection benefit but also comes up with several other benefits. If you think that it’s only a protection plan, then it is a myth.
Therefore, don’t be reluctant to buy an insurance policy for yourself. A life insurance plan gives enormous benefits other than protection benefit like dual tax benefit, wealth creation, liability control, etc. However, buying insurance for investment purpose should not be your priority goal, rather protecting yourself should be your priority goal while buying an insurance plan.
Provides protection to your family
If your family is having only one bread earner, then taking an insurance plan is a must. You should protect those who are dependent upon you. And also, it is necessary to protect your financial liabilities before making any investment or taking loans for your financial goals. Ideally, it is best to have a term insurance plan at an early stage of life because it will provide you a bigger cover by paying a smaller amount of premium against it.
Provides survival benefit
A protective plan always helps you secure your finances during miss-happenings. Moreover, many insurance plans come up with survival benefit where you can get good returns on the premium paid till the maturity of the plan.
Provides tax saving
Life insurance comes up with a dual tax benefit option. Once you have taken the policy, you can claim a maximum deduction of Rs 1.5 lakh under section 80C of I-T Act, and if you have received any sum or bonus under the life insurance policy, then that will also get tax exempted under section 10(10D) of the I-T Act 1961.
Provide wealth creation
Taking insurance is one of the secure ways of creating wealth. However, taking insurance for growth should not be your first priority for making investments. Insurance plans like ULIP’s not only helping in getting protection but also help you in generating a good corpus for your future financial goals. Some insurance plans like endowment one also provide survival benefit. Moreover, your sum insured also acts as a security against which you can get a loan from banks.
Helps in liability control
When people buy a home for themselves, they have the liability to repay their loan amount over 15 to 20 years or more. In the case of a joint home loan, what if the payee of the home loan dies? Having an insurance plan at that point in time becomes very necessary as it can limit the liability if something happens to you or the spouse. In such a case, the other person can simply repay the loan by claiming the insurance amount from the insurer.