Life Insurance is a contract between an insured and a life insurance company, where the insurance company pays a lump sum amount to the nominee/insured in exchange for the premium after a certain period or upon the death of the insured.
The perks of buying a life insurance policy are beyond protecting the policyholder's family in tough times. Undoubtedly, it is a necessity for a breadwinner to safeguard their dependents in case of their unfortunate and untimely demise, accident or physical disabilities that lead to a loss of income. Having said that, there is a long list of other benefits that make life insurance plans a must-have. Sadly, most people are not aware of the many benefits offered by a life plan.
What is Life insurace:
tax benifits and Financial Safety
Secure your feature
Peace of Mind
Benefits of Life Insurance Plans:
Death and disability benefits
There are plenty of other benefits offered by life policies such as maturity benefits, tax benefits etc
Acts as a Loan Collateral: Till date, many people don't know that life policies can also be used as loan collateral. Based on the type of the life insurance policy and the surrender value, the policyholder can opt for a loan from a bank or NBFC (Non-Banking Financial Company) as per applicable terms and conditions. Loan Amount: Generally, the loan amount is a percentage of the surrender value of the life policy and it can go up to 90%. There are few companies that only allow for a loan up to 50 percent of the total premium amount paid by the policyholder.
Online Payment Discount: Most individuals are unaware of the online payment benefit (the payment mode chosen by an individual drastically affects the premium of a life insurance policy). As a matter of fact, a life insurance company's administrative costs considerably go down when an individual opts to pay his premiums online. This is because there is no paperwork-related cost involved. Also, the life insurer is able to save a significant amount on the commission, which they pay to the agents for offline life insurance buying and renewing. Please Note- This discount varies from company to company.
Discount as per the Opted Payment Periodicity : Almost every life insurer offers various payment periodicities to its policyholders- annual, half-yearly, quarterly or monthly mode. If a policyholder chooses to pay the policy premium on an annual basis, the company can use it for investment purposes that automatically means more profits and benefits for the company. Once a policyholder chooses the payment periodicity, this discount is often already included in the premium rate charged by the life insurer.
Taking Care of Business: : There are some life insurers that provide an option for policyholders who own a business. In the case of a policyholder's demise, their business partners can purchase the policyholder’s share without any hassles. In this scenario, the business partner will simply have to sign an agreement with the life insurer and the pay-out received after selling the policyholder's share will be given to their dependents. However, it's important to understand that the nominee or the dependents of the policyholder won’t get a stake in the company.