Top 5 Benefits of
Life Insurance
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Benefits of Life Insurance
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Benefits of Life Insurance

Life Insurance is an important tool for financial planning. It allows individuals to afford a wealthy life and provide financial security for their loved ones. It even provides extra benefits for women because women have a higher life expectancy than men. These are the most basic benefits that you'll get in life insurance. But there are some other advantages of life insurance based on the type of policy that you purchase and the amount of life cover you opt for. It even provides extra benefits for women because women have a higher life expectancy than men.

In this article, we're discussing the top 5 benefits of life insurance apart from the fact that it can provide a death benefit to your family after your demise.

Advantages of Having Life Insurance

The motive of buying life insurance is to give your family financial stability if something happens to you.

For instance, Bhanu chose a life cover amount of Rs. 10 Lakhs. It sounds like an adequate cover, but it may not be adequate after 20-30 years from the time when Bhanu purchased the policy. Therefore, apart from choosing the right death benefit, purchasing a good enough life insurance policy can serve multiple objectives such as:

  • Paying off debts or loans, such as home, marriage, and car loans.
  • Acting as a replacement of income that the policyholder used to earn.
  • Paying for the insured person's funeral.
  • Provide funds for kids' higher education, marriage, and monthly expenses.
  • Helping with the care of spouse and aging parents.

What are The Benefits Offered by Life Insurance?

Here are the top 5 benefits offered by life insurance:

  1. Maturity Benefits

    There are seven types of life insurance products, and beyond your life cover, each type of life insurance also provides different benefits. Maturity benefit is one of them. Under maturity benefit, you can get all your premiums back if you outlive the policy term. It turns life insurance into an important saving tool.

  2. Tax Benefits

    Under sections 80C, 80D, & 10(10D) of the Income Tax Act 1961, you can enjoy tax benefits in life insurance. However, the death benefits payouts are tax-free. With your life insurance policy, you can maximize your tax savings under the various sections.

    • Under Section 80C, your premium payouts are eligible for a tax deduction.
    • Under Section 80D, you'll get a tax exemption of 75,000 annually on health riders, such as critical illness riders and accidental permanent and total disability riders.
    • Under Section 10(10D), you can enjoy a tax exemption on death benefits and maturity benefits.
  3. In-built Optional Covers

    Each plan comes with specific ‘add-on riders’ that allow you to opt for additional benefits in your life insurance policy. It helps you increase your base cover and gives extra protection against specific conditions.

    Here are the most common riders available in life insurance:

    • Accelerated death benefit rider
    • Accidental death benefit
    • Critical illness rider
    • Accident disability rider
    • Income rider
    • Waiver of premium
    • Return of premium rider
  4. Wealth Creation

    Some life insurance variants give you a hassle-free chance for wealth creation such as ULIPs. Apart from life cover, this plan invests some of the premium in the market to provide returns. However, one of the best aspects of ULIP's plan is that it allows policyholders to withdraw some money whenever needed.

  5. Guaranteed protection

    Life insurance is a basic need for those who have loved ones, a business, or a family who depend on them. It is an important protection you can count on so that your family will be cared for financially when you're not around.


Life insurance is a pure protection plan and comes with numerous benefits. Apart from death benefits and high life cover, we have mentioned the top 5 benefits of life insurance above. To avail of these benefits, you do have to make a long-term commitment to paying premiums and keeping the policy intact.

Top 5 Benefits of Life Insurance

1. What are the benefits of life insurance?

Life insurance is an important financial tool to help take care of your family financially if something happens to you. It helps your dependents to maintain financial stability and replace the income for years of lost salary.

2. How do you get more benefits while buying life insurance?

You can get more benefits if you buy a life insurance policy when you're younger and healthier. Generally, life insurance providers offer younger customers lower rates.

3. Is it good to take life insurance?

In case you've got a risky job or have a chance to get a terminal illness and want to secure your family's future financially, then life insurance is worth buying.

4. How to get wealth creation benefits in life insurance?

ULIPs plan is one of the life insurance products that offers you the chance to get higher returns along with a life cover.

5. What are the different types of life insurance policies?

There are seven types of life insurance products:

  • Term Insurance Plans
  • ULIPs – Unit Linked Insurance Plans
  • Endowment Insurance Plans
  • Money Back Insurance Plans
  • Whole Life Insurance Plans
  • Child Insurance Plans
  • Retirement Insurance Plans

Life Insurance Companies

Compare and buy the most suitable Life Insurance Plan from the below-mentioned IRDAI-approved Life Insurance companies.

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Sahil Singh Kathait

Written By: Sahil Singh Kathait

Sahil is a passionate content writer with over two years of expertise in the insurance domain. He uses his knowledge in the field to create engaging content that the customer can relate to and understand. His passion lies in simplifying insurance terminology, ensuring a hassle-free understanding for potential policyholders. With his outstanding collaborative efforts with people, he understands different perspectives and keeps readers' viewpoints at the forefront of his content writing approach.