What Is Insurance? || Benefits Of Life Insurance || 7 Types Of Insurance ||Knowledge With Raj ||
What
Is Insurance?
Insurance is a contract, constituted by a
policy, in which an individual or entity receives financial protection or
reimbursement against loss from an insurance company. The corporation pools
clients' perils to make payments more affordable for the insured.
Insurance plans are used
to hedge against the risk of financial losses, both large and small, that may
result from damage to the insured or her property, or from liability for hurt
or trauma caused to a third party.
Benefits of Life Insurance
Life Risk Cover: Life
insurance provides you with a high life risk cover that holds you and your family
protected in case of an unfortunate event.
Death
Benefits: Investing
in life insurance gives you and their own families a procure future. In case of
any untoward happening to the insured, the insurer pays up the entire sum i.e.
the sum assured plus the bonus to the bereaved family. Life assurance also
safeguards the interest of people who have diminishing incomes with advancing
age, people who meet with accidents or for retired people. There are numerous
policies available and you can choose the policy that will best suit your
requirements.
Return
on Investment: Life
insurance schemes return better when compared to other investment alternatives.
Most of the life insurance schemes give bonuses that no other investment
strategy can provide. The money invested in life insurance is safe and
cover-ups perils. The money expended will fetch good returns and will be
returned amply as the sum assured either after the completion of the term or
after the demise of the insured. Both lanes the money expended and the returns
are safely paid back.
Tax
Benefits: Section
80 C of the Income Tax Act is an effective way for the salaried person to
reduce tax liability. Under this section, investments constructed in the
specified instruments are subject to rebate. Currently, the amount available
for the rebate for the purposes of section 80 C is Rs. 100,000 which can be
invested in life insurance premiums, pension superannuation fund, employee
provident fund, equity associated mutual fund schemes, National Savings
Certificates and public provident fund( maximum Rs 70,000 ). The amount
invested in these instruments is eligible for a rebate through the allowance of the
amount from gross taxable income.
Loan
Alternative: Life
insurance provides you the advantage of taking a policy loan in case you are in
desperate need of money. The loan amount that can be taken in a percentage of
the cash value or sum assured under policy depending on the policy provisions.
Assured
Income Benefits: Your
family bides fastened due to the assured income they receive at regular
intervals. This income assists in paid under all rents, loans and other
expenses like house rent, telephone and electricity bills, Child education,
etc. This income compensates for the income that discontinues after the loss of
the earning member.
Life
Stage Planning: Life
insurance assists you in life stage scheming where you can plan your life's
fiscal purposes as per your convenience. It helps you plan for your life stage
needs. Life Insurance not only provides for financial support in the event of
untimely death but likewise acts as a long term investment. You can meet your
goals, be it your children's education, their marriage, house your dream home
or scheming a relaxed retired life, according to your life stage and risk
appetite.
Riders: Riders
are the additional benefits that can be bought and added to a basic insurance
policy. These alternatives allow you to increase your insurance coverage.
Riders cover dangers that are beyond the scope of the main life policy,
resulting in more comprehensive protection. The riders may encompass critical
illness, personal accident, household income benefit and waiver of premium
advantage. This additional cover steps in during situations where the main life
insurance policy may not come into play. They also furnish tax benefits and
make you eligible for allowances in line with life and health coverings. For
instance, if you opt for an accidental death rider, you are entitled to claim
deductions under section 80 C on premiums paid; for critical illness, the
relevant section will be 80 D.
7.Types Of Insurance
1.
Life Insurance
or Personal Insurance.
2.
Property Insurance.
3.
Marine Insurance.
4.
Fire Insurance.
5.
Liability Insurance.
6.
Guarantee Insurance.
7.
Social Insurance.
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