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What are the Benefits of Life Insurance Policy?

What are the benefits of life insurance policy?

The benefits of a life insurance policy are multi-dimensional.

It protects the financial interest of your dependents in case of your premature demise, in form a lump sum pay-out (death benefit).

It also offers:

Maturity benefits – Life insurance policies such as endowment and money back policies pay a lump sum at the end of the policy term, thus helping you build a corpus for various financial goals.
Tax sops – The premiums you pay for your insurance policy are eligible for tax deductions under section 80C.
Loan facility – Endowment and money-back policies have a surrender value because of which you can use them as collateral for a loan.
Survival benefits – Life insurance policies, such as money-back plans offer periodic pay-outs at distinct intervals.
Assured income - Certain life insurance policies offer staggered payments in case you, the policyholder, suffer from a partial disability.

Do all life insurance policies offer the above benefits?
No, it depends on the type of the policy. Pure term insurance policies don’t offer any maturity benefits. Also, you can’t use term insurance as a collateral for a loan since it doesn’t have a surrender value.

When should I buy a life insurance policy?
Ideally, you should purchase a life insurance policy as early as possible, when you start earning. When you buy an insurance policy early, you can avail low premiums with a high coverage. Premiums go up with age.  
Disclaimer: Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, Tata AIG General Insurance Company Limited, Oriental Insurance Company Limited, Max Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limited under the IRDAI composite registration number CA0101.

Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. This product provides insurance coverage. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product.