Life is precious and hence getting insured is imperative. But there's much more to insurance than just providing a death benefit. Insurance offers a plethora of benefits to the insured.
1). Risk Cover
The most obvious benefit of insurance is that it gets the insured a substantial financial cover against the possible contingencies in life. Getting insured is the best way to ensure the financial well being of your loved ones, even when you are not there to care or look after them.
The seasoned investors often look insurance as a form of investment where you get the dual benefits of coverage and savings. Insurance as an investment may not yield returns as efficiently as conventional investment instruments do, but it keeps the capital intact and provides sufficient growth so as to combat inflation. As a matter of fact, some forms of insurance have been revamped in a way so as to help the insured in future financial planning, thus fulfilling his specific investment objectives such as term return of premium and child plans.
3). Tax Benefits
Insurance is a great way to enjoy substantial savings on taxes especially for those tax payers who desperately look to invest in some tax saving options at the end of the year. As per section 80(C) of the income tax act, the annual premium that you pay for life insurance is deductible from your taxable income. It lets you avail tax benefits with an upper cap of Rs 1 lakh. As per Section 80(D), the annual premium that you pay for health insurance is deductible from your taxable income. The upper cap for section 80(D) is Rs 15,000 for individuals and Rs 20,000 for senior citizens . As per section 10(10D), the death proceeds given out to the nominee is exempted from taxation.
4). Getting Loans
It is easier to get your loan approved if you are insured. Lenders treat life insurance as a financial security. Getting a loan while insured offers two benefits to the borrower, lowerinterest rates and flexible repayment options.
5). Income Protection
Insurance doesn't cater solely to meet the post death financial crisis. It also provides a financial cover against contingencies (disability/dismemberment) where the insured remains alive but becomes unable to hold a paying job. There are many variants of insurance that serve the purpose of income protection such as retirement plans which provide the old aged regular annuities to make up for the lost income. Then there are money back plans wherein the insured pays regular premiums up to a tenure and gets back the money periodically to meet his immediate financial expenses.
6). Legal Obligation
It is mandatory under law to get some forms of insurance. In India, it is a legal obligation to get third party liability coverage on your car. Many countries make it obligatory for a visitor to get a travel insurance before letting him to enter in its territory. Many foreign universities need their students to get a mandatory health cover during the tenure of their course.
Of all these, the greatest benefit that insurance offers is peace of mind. When a person knows that his loved ones will self sustain financially even in his absence, he can live worry free and make the most of his life.
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