9 Reasons Why Life Insurance is Important for You

9 Reasons to Understand the Importance of Life Insurance

FAQs About the Importance of Life Insurance

Who needs a life insurance policy? up-arrow

A life insurance policy can be an essential financial instrument for several people. This usually includes entrepreneurs, retired people, working parents, etc.

What tax benefits are available on life insurance? up-arrow

Different sections under the Income Tax Act offering tax benefits are as follows:

  • Section 10D: States that your nominee will not have to pay any additional tax on the claim amount of the policy.
  • Section 80C: According to this, you can claim a deduction of up to ₹ 1.5 Lakhs on the premiums of your policy.
  • Section 80D: You can claim a deduction under this Section of the Income Tax Act only if you include a critical illness cover in your policy.

However, you will have to fulfil certain conditions to qualify for these deductions under the Income Tax Act.

How to decide if you need to buy a life insurance policy? up-arrow

First, you will need to identify if your death will financially impact your close ones. Accordingly, you can decide the urgency of purchasing a life insurance policy.

Does age matter when purchasing a life insurance policy? up-arrow

With an increase in age, there are high risks in your life. Hence, the cost of premiums proportionately increases. So, if you purchase a policy at an early age, you will have to pay lesser premiums, and so you have the opportunity of saving more.