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TrustCapital Global Technologies

LIFE INSURANCE

Life Insurance Is A Contract Between An Insured And A Life Insurance Company, Where The Insurance Company Pays A Lump Sum Amount To The Nominee/Insured In Exchange For The Premium After A Certain Period Or Upon The Death Of The Insured.

TrustCapital Global Technologies

LIFE INSURANCE

Life insurance is a contract between an insured and a life insurance company, where the insurance company pays a lump sum amount to the nominee/insured in exchange for the premium after a certain period or upon the death of the insured.

Life Insurance

TrustCapital Global Technologies

Benefits of Life Insurance

The perks of buying a life insurance policy are beyond protecting the policyholder’s family in tough times. Undoubtedly, it is a necessity for a breadwinner to safeguard their dependents in case of their unfortunate and untimely demise, accident or physical disabilities that lead to a loss of income. Having said that, there is a long list of other benefits that make life insurance plans a must-have.
Acts as a Loan Collateral
Till date, many people don’t know that life policies can also be used as loan collateral. Based on the type of the life insurance policy and the surrender value, the policyholder can opt for a loan from a bank or NBFC (Non-Banking Financial Company) as per applicable terms and conditions. Loan Amount: Generally, the loan amount is a percentage of the surrender value of the life policy and it can go up to 90%. There are few companies that only allow for a loan up to 50 percent of the total premium amount paid by the policyholder.
Online Payment Discount
Most individuals are unaware of the online payment benefit (the payment mode chosen by an individual drastically affects the premium of a life insurance policy). As a matter of fact, a life insurance company’s administrative costs considerably go down when an individual opts to pay his premiums online. This is because there is no paperwork-related cost involved. Also, the life insurer is able to save a significant amount on the commission, which they pay to the agents for offline life insurance buying and renewing. Please Note- This discount varies from company to company.
Discount as per the Opted Payment Periodicity
Almost every life insurer offers various payment periodicities to its policyholders- annual, half-yearly, quarterly or monthly mode. If a policyholder chooses to pay the policy premium on an annual basis, the company can use it for investment purposes that automatically means more profits and benefits for the company. Once a policyholder chooses the payment periodicity, this discount is often already included in the premium rate charged by the life insurer.
Tax Benefits
For paying a life policy premium, a policyholder is eligible for a tax rebate under Section 80C of the Income Tax Act 1961. Irrespective for oneself, their spouse or their children, the premium paid for parents and in-laws is exempted. This benefit is offered by all the life insurers – be it private sector life insurers or public sector life insurers. Additionally, the maturity benefit of life policies also qualifies for tax deductions under Section 10 (10D) of the Income Tax Act, 1961.
Taking Care of Business
There are some life insurers that provide an option for policyholders who own a business. In the case of a policyholder’s demise, their business partners can purchase the policyholder’s share without any hassles. In this scenario, the business partner will simply have to sign an agreement with the life insurer and the pay-out received after selling the policyholder’s share will be given to their dependents. However, it’s important to understand that the nominee or the dependents of the policyholder won’t get a stake in the company.

Why Do I Need Life Insurance Policy?

A life insurance policy is essentially a financial cover for any contingency that is linked with human life in case of a disability, death, accident, retirement, and so forth. Human life is mostly subject to risks of demise or disability due to an accident or even natural causes. When human life is lost or suffers a disability whether partial, temporary or permanent undoubtedly it is a loss of income to a household specifically if the individual is the sole bread earner.

In the event the policyholder passes away, a life insurance plan ensures that the family has financial support.
It will help to finance the educational and various other needs of the children.
Even after retirement they have a steady flow of income.
In case of a critical illness or an accident, life insurance ensures that additional income is there even when the earnings are reduced or exhausted.
It provides for various financial contingencies and also the lifestyle requirements.
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