Life Insurance

A Life Insurance policy is a contract between the policyholder and the insurance company, where the insurer (company) promises to pay a pre-defined amount of money, called as ‘sum assured’ to the nominee, appointed by the policyholder, in the event of their death (policyholder’s) within the specified policy duration (policy term).

There are different types of life insurance in India, such as term insurance, unit-linked insurance plan (ULIP), money-back policy, whole life insurance and retirement plan etc.

Life insurance is not merely an expense but an investment in more than one way. While it serves as a financial security blanket for the policyholder’s loved ones, there are other benefits attached to it.

Life insurance helps in tax savings as the premium paid up to Rs 1.5 lakh can be claimed as income tax deduction and the sum assured received after the nominee raises the claim is totally exempt from any taxes.

Options like ULIP and money-back help in long-term savings and investment as well.