In today’s uncertain world, life insurance has become a necessity. By definition, insurance is a legal contract between two parties (the insured and the insurer) in which one party (the policyholder) agrees to pay the premium and, in return, the other party (the insurer) pays the sum insured in the event of a loss. does, will discuss the benefits of insurance.
In today’s era, everyone should have a life insurance plan. In today’s post, we will discuss what is life insurance, the types of life insurance, benefits, and its importance.
What is life insurance?
Life Insurance is a legal agreement between the insured and the insurance company, under which the insured pays a fixed premium and in return, the insurance company provides him protection for his life.
In the event of the death of the Life Assured during the term of the policy, the Life Insurance Company pays the Sum Assured to the nominee as decided by the Insured, Life insurance also offers benefits in full disability and maturity, with additional benefits depending on the type of life insurance.
Importance of Life Insurance
Insurance plays a very important role in life. We are always surrounded by accidents whenever we go out we see how many accidents happen and how many lives are lost.
Who knows on which day we may become a victim of an accident and we may die an uncertain death. In case of death, the person goes away but if he is the only earning member of the family then the family comes under financial burden for a very long time.
Let us understand this with an example-
Suppose Sam is the only earning member of the family and he is earning a lot of money. Due to which he is able to run his family well and is also able to give good education to his children. His life is going very well.
He feels that his life insurance plan will not help him as he is earning good money and is able to meet the needs of the family. Then one-day Sam dies in a road accident.
what will happen now? First of all, the income of the family will stop, which will affect the living conditions of the family and also the education of the children. When the family does not have money, he can even think of forcing him to sell his house.
Now from the above example, Sam was earning good money but he never thought of securing his family for any unforeseen event.
Here he made a mistake due to which the family had to face financial difficulties after his death. Had he bought one form of life insurance, his family would have got financial support.
Nowadays insurance companies have come up with many types of life insurance so that everyone can buy a policy according to their needs.
Benefits of Life Insurance
- This covers the event of an accident or risk.
- In case of death, the sum assured is given to the nominee so that he can spend the rest of his life well.
- It gives peace of mind that even after my death the family will not have to face the financial crisis.
- It is a safe investment in which returns are assured.
- If the plan with an investment component is taken, then the benefits are available on the expiry of the policy.
- Loans can also be taken on a life insurance policy if needed.
- Some life insurance plans also come with bonuses or dividends.
- This is how you get tax benefits.
- By investing in life insurance, you also contribute to the economic development of the country.