LIFE INSURANCE
Our country will move forward on the path of progress today, every person has his own special place set in today’s context, therefore protecting all his life is an important step for all the family members. Life insurance covers the life of a person. In this context Life Insurance is playing its important role for serve insurance for the people.
Type of Insurance
Generally, insurance is dividing into two parts.
- Life Insurance
- General Insurance
What is Life Insurance?
Life insurance means that on the death of a person who buys an insurance policy, his nominee or dependent gets compensation from the insurance company. In depth we can say, life insurance is a contract that promises to pay a specific amount in the event for which the insured person is paid the sum of insurance. There is also a period of contracting during which the sum assured is paid. The contract also prescribes a period during which the sum assured amount will be valid for payment. E.g., On the date of payment or at regular intervals on specific dates or by Insurance Company if insured person become death within the time of insurance period [1].
Certainty In Place Of Uncertainty
Under this contract, the policy holder has to pay premium to the company at fixed intervals. Government and Privates companies function primarily in this field as an organization that removes risks and induces certainty in place of uncertainty. Apart from this, it also helps the family financially on the untimely death of a premature livelihood person.
Overall, life insurance is a very good solution to the problems arising due to untimely death. In short, the life insurance solve the two problems every person life. First, when the person is to live and they have no body can support. Second, whole family dependent on a person and they become death.
What is General Insurance?
General Insurance includes insurance of home, motor vehicle, crops, animal and health insurance etc. general insurance cover all above segments in the human life is covered by insurance company. If any person causing great suffering or natural catastrophe becomes the insurance company pays damages [2].
Why buy life insurance?
Life insurance is a financial protection for contingencies related to human life, such as death, disability, accident, retirement etc. Risk of death or disability is linked to human life due to natural or accidental causes. There is a loss of family income when a person dies or is permanently or temporarily disabled. Some important factors for taking insurance:
- To ensure that yours dependents family gets some financial help in your absent.
- Adopt savings plan for the future, so that you get a regular source of income after retirement.
- To ensure your extra income when your income is reduced due to serious illness or accident.
- To meet the education and other needs of our children.
- Meet other financial contingencies and lifestyle needs.
Security of the life
In case of death of the person life savings provides full guarantee of the protection against the risk. In the condition death of the insured person, policy provider company pays the entire sum assured amount with bonus. The company provides relief, while in other savings only the amount of savings is paid on interest. So in this condition we say that insurance become security of the life.
Money in Time When Need
Nobody can know about the emergency become in their life. The need for money arising from time to time can be possible by taking a policy with a suitable insurance plan. That’s the reason we have to take insurance several different plans for emergency time. E.g., children education, hospitals bills and marriage. In contrast, policy money may be available for work such as building a house or other investments upon retirement.
Cover the Tax relief
Section 80C and Section 80D of Income tax Act entitles specified taxpayers to claim deduction for the entire amount paid to the insurance company for specified insurance schemes [3]. Life insurance is also the most suitable way to use income tax and property tax deduction. This facility is available on the amount paid as life insurance premiums, which depends on the applicable income tax rates.
Taxpayer can get concession in income taxes by availing the provisions of tax. In such cases the insured has to pay small premiums against the other type of scheme.
Requirement of the Cash
In case of insurance savings, it is easy to get a loan on the security base of a policy. Apart from this the life insurance policy is also accepted as a security for business. In addition the policy holder is also got money at the time when build a house or purchase a flat. A person can also insure his spouse or children but there are some conditions associated with it.
Help increase prosperity
Life insurance promotes all types of prosperity in our life. It provides great opportunity for long term savings as it can becomes easily by paid in small installments contained in the plan. Their plans premiums are paid either monthly, quarterly, half-yearly or yearly.
In such cases, the insured person can pay or deducted their policy premiums directly with the bank account or through company agents. Salary insurance scheme is an ideal scheme for any insurance institution however there are some terms and conditions associated with it.
Life Insurance and Other Savings
While taking the policy, the policy holder should clear that all the questions asked by the insurance company in the form are should be correct answered. No mistake, no disclosure or acceptance of risk of fraud in any document.
Reference
- licindia.in
- economictimes.indiatimes.com
- economictimes.indiatimes.com
