Advantages of Life Insurance

Advantages of Life Insurance
Life Insurance provides the dual benefits of savings and security.
The following benefits explain why this investment tool should be an
integral part of your financial plans.Advantages of Life Insurance•
Risk Cover - Life today is full of uncertainties; in this scenario
Life Insurance ensures that your loved ones continue to enjoy a good
quality of life against any unforeseen event.
• Planning for life stage needs - Life Insurance not only provides
for financial support in the event of untimely death but also acts as
a long term investment. You can meet your goals, be it your children's
education, their marriage, building your dream home or planning a
relaxed retired life, according to your life stage and risk appetite.
Traditional life insurance policies i.e. traditional endowment plans,
offer in-built guarantees and defined maturity benefits through
variety of product options such as Money Back, Guaranteed Cash Values,
Guaranteed Maturity Values.
• Protection against rising health expenses - Life Insurers through
riders or stand alone health insurance plans offer the benefits of
protection against critical diseases and hospitalization expenses.
This benefit has assumed critical importance given the increasing
incidence of lifestyle diseases and escalating medical costs.
• Builds the habit of thrift - Life Insurance is a long-term contract
where as policyholder, you have to pay a fixed amount at a defined
periodicity. This builds the habit of long-term savings. Regular
savings over a long period ensures that a decent corpus is built to
meet financial needs at various life stages.
• Safe and profitable long-term investment - Life Insurance is a
highly regulated sector. IRDA, the regulatory body, through various
rules and regulations ensures that the safety of the policyholder's
money is the primary responsibility of all stakeholders. Life
Insurance being a long-term savings instrument, also ensures that the
life insurers focus on returns over a long-term and do not take risky
investment decisions for short term gains.
• Assured income through annuities - Life Insurance is one of the best
instruments for retirement planning. The money saved during the
earning life span is utilized to provide a steady source of income
during the retired phase of life.
• Protection plus savings over a long term - Since traditional
policies are viewed both by the distributors as well as the customers
as a long term commitment; these policies help the policyholders meet
the dual need of protection and long term wealth creation efficiently.
• Growth through dividends - Traditional policies offer an opportunity
to participate in the economic growth without taking the investment
risk. The investment income is distributed among the policyholders
through annual announcement of dividends/bonus.
• Facility of loans without affecting the policy benefits -
Policyholders have the option of taking loan against the policy. This
helps you meet your unplanned life stage needs without adversely
affecting the benefits of the policy they have bought.
• Tax Benefits-Insurance plans provide attractive tax-benefits for
both at the time of entry and exit under most of the plans.
• Mortgage Redemption- Insurance acts as an effective tool to cover
mortgages and loans taken by the policyholders so that, in case of any
unforeseen event, the burden of repayment does not fall on the
bereaved family.