What is Life Insurance and how this benefit us in tax redemption?

If you buy a life insurance policy, the insurance company promises to pay you an amount at least equal to the life risk cover you have taken on the event of your unfortunate death. The company would be liable to pay the above amount to your nominee. In return of this promise, you required to pay a fixed premium to the company during the entire policy term or till the premium paying term chosen.

Why we need of Life Insurance?

A life insurance policy promises to pay a lump sum benefit to the extent of sum assured + accrued benefits, if any (as per policy terms), in case of sudden death. This helps the family overcome the financial crisis which arises due to the death of the sole bread earner. While the emotional loss is irreplaceable, the financial loss is compensated by the life insurance company. Thus, a life insurance policy provides financial protection to the life assured’s family when it is needed the most.

Importance of Life Insurance:

Now days our population is increasing day by day.

For which our daily life style and food habits are also changing which results our bad health either from some internal problem like blood pressure, Diabetics, Headache, heart attack. All these are just due to the busy life style and lot of work load.
And also we are facing lot of accident everyday due to heavy traffic on the road.

So securing our life is now days more important but still today people are not aware about their life value.
When a person buy a car then he immediately get it insured because he loves his car and do not want any kind of wastage or damage but no body take a health insurance immediate when a child get birth.
Insurance is now days must for securing our life and our family for future.

Now day’s lot many Life insurance companies are present to give this service to each and every human kind by charging some fees.
They are providing all type of insurance to the customer as per the need of a customer.
Like someone needs Life insurance plan, someone needs health insurance plan, somebody wants Term insurance plan or accidental death benefit plan.
So now days some Insurance companies are providing such type of insurance in which all these facilities are included.

How Life Insurance benefit us in tax redemption?

While taking Life Insurance first we thinks about its coverage, and tax benefits we get. Tax redemption offered under different sections of Income tax act 1961.
Saving tax with Life Insurance:

1. Section 80C
Under the Section of Income tax act 1961, the insured can avail tax benefit on the premium paid towards life insurance policies.

2. Section 10(10D)
Under Section 10(10D) of Income Tax Act, 1961 the sum assured amount plus bonus (if any) paid on surrender or maturity of the policy or in case of death of the insured in entirely tax-free for the receiver

How Life Insurance help you to stay financially safe?

Life insurance is one of the most important investments to make for your life. Most people think that you need protection only for risk coverage. In fact, due to the bulk options available- people feel that it is more of a marketing gimmick which is sales based and financial discipline is all you need to live a stress-free life. However, it is challenging to forecast the future. You never know what unfortunate eventuality you get caught up in and your loved ones are left with no financial backing at all. Insurance is crucial even for a stress-free future where you spend your retirement years enjoying the life to the fullest.

Protect your family from any financial hardships:
When the family’s sole earning member or even the highest earning member passes away, the family is thrust into a life of extreme difficulties. However, with the right steps, you can save your family from suffering after you. There are plenty of expenditures which get very difficult to take care of after the main income stops coming in.

Don’t put them under the pressure of clearing off your loans:
It happens very rarely that you find somebody to pay off your loans. If you and your spouse are together clearing the EMIs (Equated Monthly Instalments), then there is still hope for the loan sharks to not make your family life challenging. However, if you were the only one paying off the EMI, then your family will be caught in a complete rut in the absence of life insurance. Which is why getting a suitable policy with reasonable premium.