Life insurance is a smart investment option because it helps your family to stay financially secure in your absence or deal with uncertain times. In short, every responsible individual should buy a Life Insurance policy. Let’s get to know more about the policy, in detail.

Life insurance plays a crucial role in times of uncertainty. It could be in any form, be it temporary unemployment, accident, medical emergency, or times like the ongoing pandemic. Not only do such events affect you but they shake your family members a great deal, both financially and emotionally. To cope with such inevitable incidents, buying Life Insurance is necessary.

Long-Term Savings

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.

Investment Options

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.

Tax Benefits

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 a deduction up to Rs.1.5 lakh under Section 80C.