Life insurance doesn’t only give you protection benefit but, offers many other advantages also. For instance, some life insurance plans can help you save tax and create wealth. However, while buying a life insurance plan, your priority should not be creating wealth, but the protection of yourself as well as your family.
Here are some reasons to buy a life insurance plan.
Secure your finances
It helps you secure your finances during any miss-happening. Some life insurance plans come up with survival benefit whereby you get the sum assured on the maturity of the plan. Term plans, on the other hand, are pure protection plans.
Tax Saving Tool
A policy taken under the life insurance can help you claim a maximum deduction of Rs. 1.5 lakh under section 80C of I-T act, any bonus or sum received under the life insurance policy will enable you tax exemption under section 10(10D) of the Income tax act.
A person can create wealth by using insurance. Insurance plans like unit liked insurance plan not only help in getting protection but also help in generating a good corpus for the future financial goals. The sum insured also acts as a security against which you can get a loan from banks.
Diversification of liability
When you take a home loan you have the liability to repay the loan amount over 15 to 20 years or more. It goes in the form of monthly instalments(EMIs).Imagine a scenario when something happens to the payee of the home loan in case of the joint-home loan? Having an insurance plan helps in limiting the liability if something happens to you or your spouse. In such a case, the loan amount can still be paid if something happens to the insurer.
Gives a safety net to your family
If you are the sole bread earner in your family then taking an insurance plan is a must. It gives a protection to those dependent on you. It provides a cushion against your financial liabilities before making any investments or taking loans for your financial goals. Experts advise taking a term insurance plan at an early stage of life because it will give a bigger cover by paying a small premium for it.