Insurance

Insurance is a financial mechanism that provides protection against financial loss or damage. It involves a contract (the insurance policy) between the insurer (the company providing insurance) and the insured (the individual or entity purchasing insurance).

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Uploaded on May 29, 2024 | 0 Views

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1. Insurance

2. What is Insurance ? A life insurance is simply a contract between a person and an insurance company, under which the firm agrees to pay a predetermined sum of money to the person's beneficiaries or family in exchange for a series of payments over time. These payments, which go by the name "premium," are often made annually. The policy holder is the one who purchases the insurance. Life insurance guarantees a lump sum payment to the family in the event of an untimely death of the policyholder. Money cannot replace the loss, but it guarantees that the family won't face any financial difficulties even after the death of the breadwinner. The life insurance policy offers the essential protection.

3. Benefits of Insurance The following are some benefits of Insurance: Tax advantages: Purchasing a life insurance policy might ensure tax advantages.Under Section 80C of the Income Tax Act, the premiums you pay for the policy qualify you for tax exemptions of up to 1.5 lakhs of your taxable income. A full tax exemption is also granted for the death benefits under ITA Section 10(10)D. Fixed return guarantee: Life insurance products promise that you will get a fixed sum of money at a fixed period. You must examine the structures of various life insurance packages. To select the life insurance plan that best meets your needs, carefully review the structure and terms and conditions of the various life insurance policies. You can chose whatever you want. Risk mitigation and coverage: These plans offer the standard form of risk protection in the form of monetary rewards to reduce and cover hazards following the policyholder's passing. Enrolling in life insurance will shield your family from the financial dangers involved in the untimely death of the main breadwinner. Loan provision: Some policies give the choice to borrow money and permit doing so this implies that you can use the life insurance policy as collateral if you need to take out a loan, say, to pay for a child's school or marriage. Health expense coverage: The majority of these policies pay for potential medical and treatment costs should the policyholder become unwell. In order to secure your finances even while you are alive, you can add riders to the insurance policy to increase the coverage.

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