Once you get an understanding of what is life insurance meaning, as well as the different types of life insurance policies, you will find that there are 3 main advantages of getting the best life insurance policy that you should know about. Following are the 3 primary benefits offered by different types of life insurance policy:
Life is unpredictable and can be full of uncertainties. It is difficult to reduce the possibility of an unfortunate event like death. In such a scenario, the family faces financial constraints arising from the lack of a steady income.
Investing in the best life insurance policy early on in life acts as a safety blanket during such eventuality. According to the life insurance definition, the insurance provider is obliged to pay the nominee or beneficiary the pre-defined sum assured. As a result, even in the policyholder’s absence, his family stays protected.
If one wants to make long-term investments, it’s important to think about life insurance meaning. Such insurance plans help you make systematic savings and create a corpus, which can be used for several reasons, such as building a new home, financing quality schooling for your child, and funding a child’s marriage expenses.
What’s more, when you learn the life insurance definition, you will find some types of life insurance policies often offer monthly pay-outs in the form of annuities, which is an ideal way to aim at and achieve retirement goals.
Understanding the meaning of life insurance in your financial context will allow you to plan your investments efficiently as well. Life insurance providers offer Unit-Linked Investment Plans (ULIPs), which are mainly investment instruments based on the market linked returns and life insurance, meaning you can get dual benefits with a single financial product.
These market-linked life insurance products provide significant gains during maturity, therefore making them ULIPs a reliable investment tool.
According to the life insurance definition, you are required to pay regular premiums to keep the policy active. With life insurance plans, you also get tax benefits under prevailing laws as per Income Tax Act, 1961. The life insurance premium paid can be availed as a tax deduction under Section 80C of the Income Tax Act, 1961. You can avail of deduction up to Rs.1.5 lakh under Section 80C.