What are the advantages of life insurance?
There are various advantages of life insurance. Let’s look at some of life insurance benefits:
Sound Sleep benefit: When you are financially secured by life insurance, you have peace of mind and will have a sound sleep. Everyone worries what will happen to their families when they have left this world. Believing in the fact that life insurance provides a safety financial net for the family after your demise is very comforting and relaxing to the human mind.
Creation of wealth: We love to create wealth and we would love it more if someone else creates it for us. So some insurance policies use your premiums to invest in different stocks as per their expertise and help you grow your wealth.
Saving Tax: Under section 80C of the Income Tax Act, premiums paid offer tax deduction. If you happen to pay 2 lakhs rupees premium annually, this amount is deducted from your payout and lowers your tax outgo. The maturity amount too comes to you tax free as per section 10(10D) of the Income Tax Act.
Buy Young, Save More – An advantage of life insurance plans gives you the choice to lock in low premium rates while you’re young. The same policy if bought when you are older will cost you dearly as the premiums you will have to pay will be much higher than for the younger you. For example, in case of a 30 year term plan, a 20 year old would buy a 1 Crore plan by paying Rs. 5955/- annually while a 30 year old would be paying Rs. 9009/- annually for the same plan. The younger you are, the more you save.