Benefits of Life Insurance Policy

Life insurance is more than just a policy; it’s a financial safety net that offers peace of mind for you and your loved ones. Whether it’s providing security for your family or protecting your savings, life insurance plays a vital role in ensuring a stable and secure future. Long-term life insurance benefits your long-term financial goals. In this blog, we’ll understand the top benefits of life insurance and how it can offer protection and peace of mind during life’s unpredictable moments.

What is a Life Insurance Plan? 

Life insurance is like a safety net for your loved ones. It's a contract between you (the policyholder) and the insurance company, where you agree to pay a small amount regularly (called a premium). In return, the insurance company promises to provide a large sum of money to your family or beneficiaries if something happens to you. This money can help cover living expenses, debts, or future plans like education. In simple terms, it’s about making sure your loved ones are financially secure even when you're not around.

What are the benefits of Life Insurance Policy?

Here is the list of reasons what are the benefits of life insurance policy: 

1. Affordable Premiums with high return:

Life insurance is more affordable than you might think. With options like term plans, you can get significant coverage at relatively low premiums while you are young. If you purchase the same plan at an older age, you will be paying much higher premium than if you purchased the same plan when you were younger. Even small amounts paid regularly can result in high returns in terms of the payout your family receives. This makes life insurance a cost-effective way to secure your family’s financial future without breaking the bank. 

2. Financial Security and Peace of Mind:

Life insurance ensures that your loved ones are financially protected in the unfortunate event of your passing. The policy provides a lump sum payout, known as the death benefit, to your beneficiaries, which can cover daily living expenses education, and other essential needs. It offers peace of mind knowing that your family will not face financial strain during an already challenging time.

3. Tax Benefits That Lighten Your Load:

Life insurance doesn’t just protect your family—it also helps you save on taxes. Premiums paid for certain life insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh. Additionally, the payouts your beneficiaries receive are often tax-free under Section 10(10D). These benefits lighten your tax load while securing your future.

4. Wealth Creation Over Time:

Some life insurance plans, like endowment or ULIPs (Unit Linked Insurance Plans), combine life coverage with investment options. These plans not only provide financial security but also help in wealth creation over time. The premiums you pay are invested in different financial instruments, offering the potential for returns that you can pass on to your loved ones as a legacy.

5. Coverage for Critical Illnesses:

Life insurance can also include coverage for critical illnesses like cancer, heart disease, or kidney failure. This means that if you are diagnosed with a covered illness, you’ll receive a payout to help cover treatment costs, loss of income, and other expenses. It ensures you don’t have to dip into your savings or burden your family financially during a health crisis.

6. Retirement Planning:

Life insurance can be a key part of your retirement planning. Policies like annuity plans provide regular payouts after retirement, giving you a steady income to maintain your lifestyle. These plans ensure that you have financial stability in your golden years, without having to rely on others for support, making your retirement peaceful and stress-free.

7. Save for Your Child’s Future:

Life insurance can also help you secure your child’s future, ensuring their dreams are fulfilled, no matter what. Plans like child insurance policies allow you to accumulate savings over time, which can be used for your child’s education, marriage, or any other major life event. These policies provide financial support at key milestones, ensuring your child has the resources they need to succeed.

8. Death Benefits:

The death benefit in a life insurance policy provides an immediate lump-sum payout to your beneficiaries after your passing. This payout helps cover funeral expenses, daily living costs, and any other financial obligations your family might face. It ensures that your loved ones are not left financially stranded and have the support needed to continue their lives with security and dignity.

9. Flexibility with Riders:

Riders are additional benefits that you can add to your life insurance policy for more customised coverage. Common riders include critical illness, accidental death, waiver of premium, and disability benefits. These riders allow you to tailor your policy to fit your specific needs, ensuring you’re fully protected in a variety of situations.

10. Acts as a Financial Backup Plan:

Life insurance serves as a financial backup plan during times of uncertainty. Whether it’s an emergency, an unexpected loss, or a critical illness, your policy acts as a safety net, ensuring you or your loved ones have the financial resources to navigate through tough times. It’s a reliable way to prepare for the unknown, offering stability when you need it most.

What are the factors to consider before buying Life Insurance Plan?

> Evaluate and Compare Life Insurance Plans

Before choosing a life insurance plan, it's essential to compare different policies. Look at factors like coverage amounts, premium costs, and policy benefits. This comparison helps you identify which plan suits your financial goals and lifestyle. Additionally, check the reputation and financial stability of the insurer to ensure they can fulfill their obligations.

> Understand the Claim Settlement Process

It’s important to choose an insurer with a high claim settlement ratio. This ratio indicates the number of claims settled by the insurer compared to the number of claims received. A smooth and efficient claim process ensures that your family can access the death benefit without unnecessary delays or complications. Research the insurer’s customer service and claims process before committing to a policy.

> Choose Flexible Premium Payout Options

Life insurance plans often offer flexible premium payment options, such as monthly, quarterly, or annual instalments. It’s crucial to select a payment schedule that aligns with your financial situation. Some policies also offer limited pay options, where you pay higher premiums for a shorter period but enjoy lifelong coverage.

> Opt for Long Policy Tenure

When selecting a life insurance plan, opt for a policy with a longer tenure to ensure coverage throughout your most vulnerable years. A long-term policy helps you stay protected without worrying about renewals or higher premiums later in life. It also allows you to lock in premiums at a younger, more affordable rate.

> Add Riders for Enhanced Protection

Riders are additional benefits you can add to your base life insurance policy to expand your protection. Common riders include critical illness, accidental death, and waiver of premium riders. These add-ons allow you to customise your coverage to fit specific risks you may face, giving you peace of mind in more complex situations.

> Assess Policy Benefits for Long-Term Value

Finally, consider the specific benefits the life insurance policy offers beyond just the death benefit. Some plans provide maturity benefits, wealth creation options, or even loans against the policy. Ensure that the policy you choose aligns with your long-term financial goals, whether it’s saving for retirement, your child’s education, or building a legacy for your loved ones.

What are the consequences of not having a Life Insurance?

> Burden of Debts on Your Loved Ones

If you have loans or debts like a mortgage or car loan, your family might have to bear the responsibility of paying them off. Without life insurance, they could be left to manage these financial obligations on their own, leading to additional stress.

> No Savings for Your Child’s Future

Life insurance can help save for important life events like your child’s education or marriage. Without a policy in place, you might not have funds set aside for these milestones, leaving your child’s future at risk.

> No Financial Support for Your Family

Without life insurance, your family may struggle financially if something happens to you. They could be left without the funds to cover daily living expenses, education, or household bills, putting them in a tough situation during an already emotional time.

> No Backup Plan for Emergencies

Life can be unpredictable, and without life insurance, your family may not have a financial safety net in case of emergencies. Whether it’s unexpected medical expenses or unforeseen challenges, not having life insurance could mean they have to dip into savings or borrow money.

How to buy a Life Insurance Plan from Oneassure?

Step 1: Go to oneassure insurance page.

Step 2: Enter your personal information like name, mobile no., email etc.

Step 3: Choose the most suitable plan and proceed to book your free call.

Conclusion

Life Insurance is not just about providing a financial safety net; it's about ensuring peace of mind for both you and your loved ones. By choosing the right plan, you can protect your family’s future, cover important expenses, and even save for long-term goals. Whether it’s affordable premiums, tax benefits, or coverage for critical illnesses, life insurance offers a wide range of benefits that go beyond just the death payout. It’s a simple way to make sure your family is financially secure, even if life takes an unexpected turn.

So, take the first step today and explore your options with oneassure. Your family’s future is worth it!