The past year has shown us how unpredictable the world can be with the market crashing, multiple people falling sick and even more getting laid-off. While most young people understand the key benefits of life insurance, they often forget that it is a multi-purpose financial instrument. The main objective of a life insurance policy indeed is to ensure the financial security of your family after your demise, but it tends to vary a lot depending on the type of the policy and the coverage amount.
 

On the whole, there are a host of various other benefits to having life insurance. But one might want to check with their provider should they wish to avail the extra perks.
 

What are the benefits of a life insurance policy?
 

Below we have discussed the benefits of a life insurance policy that you may not have known about.
 

The common benefits of life insurance are:
 

1. Life risk cover

2. Return on Investment

3. Tax^* Benefits

4. Add-ons or rider^#

5. Better life planning

6. Income benefits
    

1. Life risk cover

   
   You guessed it; this is perhaps the most obvious benefit that one can avail of life insurance. A good insurance policy ensures the security of your family and guarantees¹ that they will be taken care of even after your departure. The insurer also ensures that your expenses are covered in case of diminishing income due to increasing age. It also safeguards against the disability due to unforeseen circumstances.
    

2. Return on investment

   
   Usually, when it comes to discussing avenues that promise rewarding returns on investments, people tend to have multiple opinions. However, if you want consistent returns with a considerably lesser risk to reward ratio, then a life insurance policy is perfect for you. You can choose customised plans that can give your regular income.
   
   





3. Tax^*Benefits

   
   One can also reduce their gross total tax^* by availing the deductions under Section 80C of the Income Tax^* Act. Section 80C allows you to reduce your total income by deducting the amount of premium paid towards the insurance policy. Having said that, you should also be aware of the fact that you can deduct only up to ₹150000, which can still have a significant impact on your total payable tax^* figure subject to meeting the terms and conditions.
    

4. Collateral for loans

   
   You might need to take a loan when you want to buy your dream house or when you want to start a side project, but it might not be easy as a lot of banks ask for collateral. Well, here’s a fun fact- life insurance policies can be used as collateral. In recent years, most banks have started accepting life insurance as collateral while issuing loans to a borrower. Life insurance policies can be used as additional collateral or as stand-alone collateral.
    

5. Better life planning

   
   With life insurance, planning for the future also becomes comparatively easier, as the uncertainty of the financial instability is removed from the mind of the policyholder. This not only enables the policyholder to think ahead with a clear mind but also lets them embark on other enterprising projects and career prospects. A life insurance policy also safeguards one from reduced income due to any disability if the individual has purchased an Add on Rider^#.
    

6. Income Benefits

   
   If due to some unfortunate event, the policyholder passes away, then their family will have two options- either they will receive a lump sum amount, or they can opt for the receipt of payment at a regular interval. The regular payment helps with the payment of all the utilities that are used by the family and can also further be used for the repayment of the loans and to meet other expenses. These income benefits also assist your children with higher education, marriage, etc.
   
    

Life Insurance plans from Tata AIA
 

TATA AIA Life Insurance provides a multipronged approach to your requirements regarding insurance policies. We offer policies to match different insurance needs. Choose from:
 

1. Term Insurance plans
2. Savings Insurance plan
3. Retirement Plans
4. Group Insurance Plans

And much more!

Life only moves forward, but it often feels like moving through a tunnel with a lot of anxiety about the uncertainties of the future. Having life insurance is a must if one wants to live a worry-free life. It not only minimises the risk but also helps with future planning. Therefore, you should consider taking up a life insurance policy to ensure a worry-free life.
 

L&C/Advt/2023/Mar/0957