Life insurance is one of the most important insurance as it protects you against the financial crisis resulting from the death of the insured. Every person faces these contingencies and is exposed to this risk. When the insured dies, then the insurance company provides financial support to its family Or his beneficiary designated in the policy.
Life insurance provides protection against the risk of early death and it is also good for investment. This insurance enables everyone to overcome the barriers of financial loss and protects against the risk of losses. In fact, the person who holds the life insurance policy also enjoys tax advantages as well.
Importance of life insurance :
1. This policy provides funds to dependents of the policy holder immediately after the death. At the time of death, the full sum is assured to the family members of the policy holder.
2. This insurance policy reduces the burden of the financial crisis which occurred after the death of earning members of the family. One can save for children for higher education, the marriage of his or her son Or daughter, building a house or start a new venture on retirement, etc.
3. Life insurance policy encourages savings and investment. In this, a person can continue a long term saving plan and those savings used in financial loss. This policy brings about compulsory saving and payment of premium becomes part of the budget.
4. Life insurance policy provides peace of mind to the policy holder. Everyone has a fear of what would happen in the future, this policy reduces the burden and overcomes the fear of the future. This will give assurance that after the premature death his family members still get support by financially
5. This policy also protects against the creditors. In the event of his death, the person whose name is written in the policy is entitled to get the benefit of the policy.
6. Life insurance policy is beneficial and a relief to the taxpayer. It reduces the certain portion of taxable income which is to be paid.
Also read about special features of Insurance contract