9 Features of a Life Insurance Policy You Need to Know

A life insurance policy is a contract between the insured person and an insurance provider. Accordingly, the policyholder will pay a fixed premium at regular intervals to the insurer during the plan duration. Upon the premature demise of the insured person or the maturity of the policy, the nominee or the policyholder, respectively, can claim the amount.

There are several features of this policy that one can benefit from purchasing a life insurance plan.

1. Substantial Coverage

Individuals can opt for sumptuous coverage, keeping in mind their family members' current and future requirements. Also, it becomes essential to consider several other factors while deciding on the right coverage amount.

This is crucial so that you can ensure the availability of sufficient funds when the policy matures. Also, a substantial amount safeguards the future needs and goals in case of your untimely demise.

2. Flexible Payout Option

Deciding on the right payout option is imperative to ensure wise usage of funds after your demise. You can go for a bulk payout of the claim amount if you have complete faith in your family that they can manage funds wisely.

Otherwise, if they have a habit of overspending and cannot manage funds properly, you can opt for monthly payouts of the claim amount. This would be a monthly income for your family and ensure wise use

3. Coverage for Longer Duration

4. Availability of Additional Riders

5. Inclusion of Terminal Illness Cover

6. Availability of Death Benefit

7. Availability of Tax Benefits

You can get a tax benefit on your policy's premiums according to Section 80C of the Income Tax Act. According to this Section, you are eligible for deductions of up to ₹ 1.5 Lakhs on your policy's premiums.

Also, you can avail of tax benefits on the claim amount under Section 10D of the Income Tax Act. Besides, tax benefits under Section 80C on the premium paid and Section 80D in some cases are also available as per the prevailing tax laws.

8. Premium Payment

You will have to pay a fixed amount as premiums periodically. You can choose the frequency of premiums at your convenience. You also have a choice of paying premium as a single premium or regular ones, depending on your kind of plan and insurer. 

This enables you to plan your periodic budget more efficiently and avoid any additional burden on your finances.

9. Availability of Maturity Benefit

In case you outlive the policy term, you can claim a maturity benefit on it. This might include the sum assured, some additional bonuses, and terminal bonuses. It is beneficial as you can make some profit simultaneously from your plan.

Considering these features of insurance plans, you can purchase a life policy to suit your needs. This ensures that you and your family stay financially protected and worry-free in case of financial urgencies or any unfortunate situations.